Wk5 Case Study: Entrepreneurship

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Encouraging Entrepreneurship:

Resources Supporting Small Business Startup and Growth

Karen A. Eagle B.S. May 1983, James Madison University M.S. August 2010, Old Dominion University

A Dissertation Submitted to the Faculty of Old Dominion University in Partial Fulfillment of the

Requirements for the Degree of

DOCTOR OF PHILOSOPHY

OCCUPATIONAL AND TECHNICAL STUDIES

OLD DOMINION UNIVERISTY May 2016

Approved by: Cynthia Tomovic (Co-Director) Darryl C. Draper (Co-Director) Dana D. Burnett (Member)

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ABSTRACT

ENCOURAGING ENTREPRENEURSHIP: RESOURCES

SUPPORTING SMALL BUSINESS STARTUP AND GROWTH

Karen A. Eagle

Old Dominion University, 2016

Co-Directors: Dr. Cynthia Tomovic

Dr. Darryl Draper

Small business success drives the health of a local economy. The problem of this three

phase mixed methods study was to encourage entrepreneurship by identifying the resources

that support business startup and growth. In the first qualitative phase, the city business

resource webpage was observed and 10 entrepreneurs were interviewed to identify which

business resources were used for their recent startups. Using the data from the interviews, a

survey instrument was developed for the Small Business Subcommittee (SBS) that was used in

the second quantitative phase which included 351 business owners; 35% were women and 65%

were men. The sample represented small businesses of varying sizes and industries including

construction trades, professional services, retail, manufacturing, food service, personal service,

and healthcare/biotechnology. Ethnicity of the sample population mirrored the ethnicity of the

city population. The Small Business Survey included 17 Likert-style and 2 open ended

questions. Descriptive statistics were used to report the findings and the open ended questions

were reviewed and coded by the researcher and the SBS. Exploratory factor analysis was

performed on 12 items to validate the survey instrument. The data were used to develop a

protocol for the third qualitative phase of the study and thirteen entrepreneurs who had used

public business resources were interviewed. Three researchers coded the data to provide

interrater reliability. Themes were clustered and a model for small business startup and growth

was developed. The results indicated that the city could improve business growth by providing

information for startups, creating a streamlined process, developing an attitude that supports

small business owners, offering more training opportunities, and initiating supporting services.

This dissertation is dedicated to my husband Dan, the love of my life, and to my son John, on

whom the sun rises and sets. Thank you for the endless encouragement and support; this

would not exist without your help. I love you both dearly!

I dedicate this dissertation also to my late parents, Ray and Barbara Weinig. My father instilled

in me a love of learning and striving for excellence. Mom was the greatest encourager on the

planet and the embodiment of unconditional love.

Karen A. Eagle

ACKNOWLEDGEMENTS

To Dr. Cindy Tomovic, my Co-Chair and friend, I wouldn’t be here without you. Thank

you for suggesting that I seek this degree, for your guidance and leadership in this project, and

for the countless hours and hours spent discussing and later editing each phase of this study. I

am forever grateful for your endless support, your expectations for excellence, and especially

for your friendship. To Dr. Deri Draper, my Co-Chair and advisor, you are the reason that I

stayed in the program. With your vast experiences in business, you helped me transition from

practitioner to researcher. You taught me the ropes and your contagious enthusiasm for life and

for learning inspired me, as did your knowledge and understanding of technology in education.

You are a bright light that shines at Old Dominion. To Dr. Dana Burnett, my Leadership

professor, you have a special place in my heart; your kindness and guidance my first semester

at ODU helped me acclimate to academia and your teaching style inspired me. Thank you for

your continued encouragement; I am so blessed to have you on my committee. To Dr. Tony

Perez, thank you for your advice on data analysis and for directing me to factor analysis for this

study. You are a fantastic statistics instructor and I was fortunate to take your class!

I would also give special thanks to Elizabeth Dietzmann; our chance meeting at the

oceanfront shop changed my course entirely and led to this dissertation. Thank you for inviting

me to attend that first SBS meeting, for your support in survey development and data coding, for

introducing me to entrepreneurs to interview, and for bringing me to 1MC. I am thankful for the

members of the SBS that spent additional time coding data and offering further support: Tom

Etter, Tony DiSilvestro, Tuck Bowie, Dane Blythe, Patti Phillips, and Petula Moy; special thanks

to Councilman Bobby Dyer for spearheading this initiative and supporting my research. I want

to thank the entrepreneurs who participated in Phase 1 and Phase 3 interviews for their

valuable time and honest comments; you remain anonymous. To my fellow researchers, thanks

vii

for all the hours spent coding Phase 3 interview data. And finally, I want to thank my friends

and family for believing in me every step of the way.

viii

TABLE OF CONTENTS

Page

LIST OF TABLES ………………………………………………………………………………………………………… x LIST OF FIGURES …………………………………………………………………………………………………….. xI

Chapter

I. INTRODUCTION …………………………………………………………………………………………. 1 STATEMENT OF THE PROBLEM ……………………………………………………………… 2 RESEARCH QUESTIONS ……………………………………………………………………….. 2 BACKGROUND ……………………………………………………………………………………… 2 SIGNIFICANCE OF THE STUDY………………………………………………………………. 3 LIMITATIONS ………………………………………………………………………………………… 5 ASSUMPTIONS ……………………………………………………………………………………… 6 PROCEDURES ……………………………………………………………………………………… 6 DEFINITION OF TERMS ………………………………………………………………………… 8 SUMMARY AND OVERVIEW OF CHAPTERS …………………………………………… 8

II. LITERATURE REVIEW ……………………………………………………………………………….. 10

ENTREPRENEURSHIP EDUCATION AND RESEARCH …………………………….. 10 ORIGINS OF ENTREPRENEURSHIP EDUCATION` ………………………………….. 10 MODERN ENTREPRENEURSHIP EDUCATION AND TRAINING ………………… 12 CONCEPTUAL FRAMEWORK: ELEMENTS OF BUSINESS SUCCESS ……… 13 PERSONAL SKILLS ……………………………………………………………………………… 14 CAPITAL: FINANCIAL, HUMAN, AND SOCIAL ………………………………………….. 16 PUBLIC AND PRIVATE RESOURCES……………………………………………………… 21 SUMMARY ………………………………………………………………………………………….. 26

III. METHODS AND PROCEDURES …………………………………………………………………. 27

SAMPLE ……………………………………………………………………………………………… 28 PROTOCOL AND SURVEY DEVELOPMENT ……………………………………………. 31 METHODS OF DATA COLLECTION ………………………………………………………… 42 ANALYSIS …………………………………………………………………………………………… 44 SUMMARY ………………………………………………………………………………………….. 47

IV. FINDINGS ………………………………………………………………………………………………… 49

PHASE 1: WEBSITE OBSERVATION AND INTERVIEWS …………………………… 49 QUESTIONS AND THEMES FROM INTERVIEWS…………………………………….. 51 NEW THEMES……………………………………………………………………………………… 56 PHASE 2: VIRGINIA BEACH SMALL BUSINESS SURVEY ………………………… 63 FACTOR ANALYSIS ……………………………………………………………………………… 71 OPEN ENDED QUESTIONS ………………………………………………………………….. 75 PHASE 3: INTERVIEWS WITH ENTREPRENEURS WHO USED PUBLIC BUSINESS RESOURCES ……………………………………………………………………… 87

Page THEMES FROM INTERVIEW QUESTIONS ……………………………………………… 87 MODEL FOR VIRGINIA BEACH ……………………………………………………………. 113 SUMMARY ………………………………………………………………………………………… 115

V. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS ……………………………. 117 SUMMARY ………………………………………………………………………………………… 117 CONCLUSIONS………………………………………………………………………………….. 120 RECOMMENDATIONS ………………………………………………………………………… 123

REFERENCES ……………………………………………………………………………………………………….. 130 APPENDICES

A: Protocol Questions –Phase 1 …………………………………………………………… 151 B: Interview Consent Form …………………………………………………………………… 152 C: Virginia Beach Small Business Survey ………………………………………………. 153 D: Protocol Questions –Phase 2 …………………………………………………………… 156

VITA ………………………………………………………………………………………………………………………. 157

LIST OF TABLES

Table Page 1. Phase I: Protocol for Interviews with Entrepreneurs ………………………………………………….. 30

2. Phase II: Virginia Beach Small Business Survey ………………………………………………………. 32

3. Labels and the Related Research Question for Survey Analysis ………………………………….. 37

4. Phase 3: Protocol for Interviews with Entrepreneurs ………………………………………………….. 40

5. The Phenomenological Analysis Process …………………………………………………………………. 45

6. Summary of Themes from Phase 1 Interviews ………………………………………………………….. 51

7. Race/ethnicity of Participants and the City of Virginia Beach ……………………………………….. 63

8. Type of Business ………………………………………………………………………………………………….. 63

9. Estimated Annual Revenue ……………………………………………………………………………………. 64

10. Number of Employee (Including Respondent) …………………………………………………………… 64

11. Number of Years in Business …………………………………………………………………………………. 65

12. Descriptive Statistic Results From Survey Questions: Mean, median, Standard Deviation and Variance ……………………………………………………………………………………………………….. 67

13. Factor Analysis and Pearson Correlations ……………………………………………………………….. 72

14. Eigenvalues and Percentages of Explained Variances For Analysis Of Survey Questions ……………………………………………………………………………………………………………. 73

15. Factor Loadings and Communalities For 12 Items From the Virginia Beach Small Business

Survey ………………………………………………………………………………………………………………… 74

16. Recurring Themes from Open-End Questions …………………………………………………………… 76

17. Summary table of themes, Phase 3 Interviews ………………………………………………………….. 87

LIST OF FIGURES

Table Page 1. Conceptual Framework: Elements of small business success …………………………………….. 14

2. Mixed method process model in the study of small business startup and growth …………… 27

3. Themes from the city Business Resource page …………………………………………………………. 50

4. Words used to describe the experiences opening a business in Virginia Beach ……………… 57

5. Initial business startup Phase 1 model: interviews ……………………………………………………… 62

6. Individuals that participants contacted for guidance before opening their business(s) ……… 65

7. Number of individuals interested in each workshop and percentage of interest in each workshop …………………………………………………………………………………………………………….. 70

8. Recurring words in open ended responses on the Small Business Survey …………………….. 76

9. Virginia Beach survey results: Components for business startup and growth. ……………….. 86

10. Themes from Phase 3 interviews ……………………………………………………………………………. 88

11. Themes from three phases of the study …………………………………………………………………. 113

12. Model for small business startup and growth in Virginia Beach ………………………………….. 114

CHAPTER I

Introduction

Small businesses play a critical role in the health of an economy. Entrepreneurs who

succeed in their endeavors can grow their businesses, employ more people, and will pay more

taxes; conversely, businesses that struggle or fail can cause the loss of jobs, wages, and tax

revenues. While anyone can start a business in the United States, no education or training is

required; entrepreneurs start their own operations because they seek control over their lives by

doing something personally enjoyable while creating the opportunity for success (Begley &

Boyd, 1987; Jarillo, 1988; Markman & Baron, 2003; Poschke, 2013). However, these

motivations alone do not prepare individuals for the rigors of business ownership. Business

owners require knowledge and special skill sets in order to succeed in today’s competitive

business landscape and can benefit from business planning (Brinckmann, Grichnik, & Kapsa,

2010; Chrisman & McMullan, 2004). In the United States, many individuals start companies

without the information they need to compete and stay in business (Townsend, Busenitz, &

Arthurs, 2010; Watson, Hogarth-Scott, & Wilson, 1998).

The recent recession ranks as history’s worst in terms of the number of jobs lost since

1945, and policymakers are turning their attention to potential new firm growth to provide jobs

and economic stability (Stangler, 2011). With the subdued startup activity, policies at the

federal, state, and local levels can influence an individual's ability to start a business and impact

the growth and survival of the firm (Wiens & Jackson, 2014).

In Virginia Beach, Economic Development offers free courses for entrepreneurs and a

mentorship program through the Small Business Development Center. Although studies show

that individuals who own businesses desire training (Liang & Dunn, 2012; Watson et al., 1998),

few entrepreneurs participate in these programs. Are the business owners aware of the

opportunities available? A myriad of information sources, courses, and consulting opportunities

exist in the city and few business owners are participating. Do they have problems finding this

information? Are new entrepreneurs aware of what they don’t know and operating their

business under the assumption that they are informed, in other words, do they know what they

don’t know (Koch, 2006)?

Statement of the Problem

The problem of this study was to encourage entrepreneurship by identifying the

resources that support business startup and growth.

Research Questions

The research for the mixed-method study was guided by the following research

questions relative to Virginia Beach.

RQ1: What are entrepreneurs’ informational needs for business startup and growth?

RQ2: What resources do entrepreneurs seek and use before starting up a new business?

RQ3: To what degree do entrepreneurs perceive Virginia Beach as helpful in the process

of small business startup in the city?

RQ4: To what degree do entrepreneurs perceive Virginia Beach as supportive to small

business expansion?

RQ5: To what degree do entrepreneurs utilize training services offered by the city?

RQ6: What type of training workshops would entrepreneurs want to attend?

RQ7: What resources and assistance should public agencies offer that support

entrepreneurship?

Background

New businesses are important for economic growth and small firms are the significant

players. According to the U.S Census Bureau and the Small Business Administration (SBA),

99.7% of all US companies are “small businesses” and although the SBA defines small

businesses as having fewer than 500 employees, 98.2% of “small” firms have 29 or fewer

employees and 81% of these businesses are considered to be “micro businesses” because they

have five or fewer employees (Olsen, 2015; Ryan, 2014). Small business accounts for 41.7% of

employment for the country’s labor force and account for 67% of new jobs (Rauch, Doorn, &

Hulsink, 2014; Stangler, 2011). Despite these promising statistics, firms closing their doors

have steadily increased in the past ten years, with only 44.6% surviving after five years in

operation (Robb, 2013). Of the 55.4% that fail, 80% of those firms can expect to fail within the

first 18 months after opening (Wagner, 2014).

Startups account for nearly all net new job creation and almost 20% of gross job creation

(Wiens & Jackson, 2014). In 2007, the figure was roughly 12 million, or two-thirds of new jobs

(Stangler, 2011, p. 6) and the smaller companies created more of these jobs than larger firms.

However, the real driver of disproportionate job growth has been firm age; since 1980, nearly all

net job creation has come from young firms, less than five years old (Bradley, Dutt,

Mohsenzadeh, Pogue, & Sun, 2012; Haltiwanger, Jarmin, & Miranda, 2013; Stangler, 2011;

Wiens & Jackson, 2014).

The number of new businesses have always outpaced business failures since the US

Census bureau has been measuring business “births and deaths”; nonetheless, the startup

numbers began declining in 2008, ranking the United States 12th among developed nations for

startup activity per capita (Clifton & Badal, 2014). Currently, the number of business “deaths”

far exceeds the number of “births” by 31% ("Small business facts," 2015). These declining

start-up rates threaten growth. Additionally, fewer young adults are starting their own

businesses; the proportion of people under 30 owning a business has fallen to the lowest level

in at least 24 years (Simon, 2015).

Significance of the Study

The consequence of lower startup rates can have a severe effect on the economy. Jobs

lost in established industries due to the recession, globalization, and regulation may never

return; therefore, employment and economic growth may depend on new ventures (Blank,

2013b). Education can be the most significant factor that the public sector can affect to

influence start-up rates and growth (Motoyama & Bell-Masterson, 2014) and entrepreneurs are

hungry for information to help them run their businesses. Liang & Dunn (2012) interviewed 564

business owners and found that many entrepreneurs who were currently operating businesses

felt that they needed to gain more business training and would seek help if they were to start

another business. Watson et al. (1998) documented that business owners seek training to

develop their business planning relative to their perceived needs and found that the primary

subject sought for advice centered on developing a formal business plan; 13 other subject areas

of interest for new business owners showed low participation. The authors posited two

important questions for future research: first, “Do applicants correctly perceive their training

needs prior to a business start-up” and second, “Is high quality training in appropriate areas

readily available?” (p. 236).

Municipalities can create programs to assist entrepreneurs with network formation,

provide peer learning opportunities and mentorships to help new businesses start and existing

firms grow (Wiens 2014). Research has shown that guided assistance offered by local Small

Business Development Centers (SBDC’s) improves the growth of firms (Chrisman, McMullan, &

Hall, 2005; Chrisman & McMullan, 2004). But researchers have repeatedly found a “lack of

coordination between economic development activities and support for small business” (Gomez,

Isakov, & Semansky, 2015). In Hampton Roads, these programs already exist. Interviews with

local Economic Development officials revealed, however, that the free workshops offered by the

SBDC are poorly attended. Also, SCORE (the Service Corps of Retired Executives) offers free

business counseling and few nascent owners seek their advice. The researcher recently

conducted three ten-week entrepreneurship training camps called the Hampton Roads Retail

Academy for the Hampton Roads Chamber of Commerce and all sessions were sparsely

attended. The lack of participation in sponsored programs has city officials believing that there

is an absence of interest in the services. Why don’t business owners participate? In a study of

entrepreneurs in a Midwest county, Birley (1985) found that business owners and their social

networks appeared to be unaware of formal sources available for guidance. And apparently, in

Virginia Beach, people also seem unaware of these resources.

In Virginia Beach, the recession has had a significant negative impact shown by

decreases in the General Sales tax, Utility taxes, and Business Licenses which reflect the

shrinking business population in the city and present added stress to the overburdened city

budget (Spore, 2015). To overcome such shortfalls in Virginia Beach, city officials are looking

for ways to increase business startups and empower growth in existing businesses. With a goal

to “promote small business and entrepreneurial activity with every resource available” ("Virginia

Beach strategy to grow includes small business," 2014), the city of Virginia Beach initiated a

Small Business Subcommittee (SBS) to develop a survey to identify barriers to small business

success in order to maximize prosperity in the community by recommending practical solutions

to help small businesses thrive ("Small business subcommittee," 2015).

There is a void in the literature describing the motivations for entrepreneurs to use small

business support programs (Shabaya, 2014). The aim of this mixed methods study was to learn

whether entrepreneurs are aware of available public resources that assist startups and

empower business growth and to identify the factors that influenced their decision to use them.

Limitations

The participants of the study included only entrepreneurs with businesses in Virginia

Beach, Virginia. Participants self-selected and the samples for the qualitative interviews did not

include business owners from every industry. Assistance available from government services

was limited to the area. Bias was a limitation in the interviews in which the participants were

acquainted with the researcher.

Assumptions

This study was conducted in a south-eastern Metropolitan Statistical Area and assumed

that the surrounding cities offered free or low cost services and resources for entrepreneurs.

Another assumption was that business owners were unaware of available government services

that can enhance business growth. It was assumed that there is a gap between the knowledge

possessed by nascent entrepreneurs and the knowledge required to start and operate a

successful business.

Procedures

The study followed a mixed method design. The first phase of the study explored the

informational needs and use of business start-up resources for the purpose of developing a

survey instrument for the small business population in Virginia Beach and addressed the first

two research questions:

RQ1: What are entrepreneurs’ informational needs for business startup and growth?

RQ2: What resources do entrepreneurs seek and use before starting up a new business?

Based on the literature view, protocol was developed and interviews were conducted from a

sample of 10 entrepreneurs with businesses in Virginia Beach. It was necessary to first conduct

a qualitative study as there were no existing instruments or data that assessed the barriers to

small business growth nor the needs for entrepreneurship training based on the views of the

participants (Creswell, 2007).

The second, quantitative phase followed up on the qualitative phase to answer research

questions 3, 4, 5, and 6:

RQ3: To what degree do entrepreneurs perceive Virginia Beach as helpful in the process

of small business startup in the city?

RQ4: To what degree do entrepreneurs perceive Virginia Beach as supportive to small

business expansion?

RQ5: To what degree do entrepreneurs utilize training services offered by the city?

RQ6: What type of training workshops would entrepreneurs want to attend?

A survey instrument was developed based on the initial interviews, and again was informed by

the literature review. Three hundred and fifty one business owners in Virginia Beach completed

the survey, which included 12 Likert-scale questions and two multiple choice open ended

responses that addressed the operations of the city. Quantitative data were analyzed using

descriptive statistics and a factor analysis was performed to validate the instrument for future

studies.

The Virginia Beach Small Business survey indicated a need for further research to study

the gap identified between entrepreneurs’ desire for government sponsored training and the

programs in place that are not attended. The third, qualitative phase of the study explored the

aspects of public business resources that are most helpful for entrepreneurs to answer the final

research question:

RQ7: What resources and assistance should public agencies offer that support

entrepreneurship?

A purposeful sample of 13 entrepreneurs was selected, representing small business

entrepreneurs who have used public services for startup assistance in Virginia Beach. Protocol

was developed based on the results of Phase 1 & 2 and data were collected during individual

interviews with business owners who volunteered to participate in the study. The protocol,

comprised of open-ended questions, was designed to confirm the model developed in Phase 2

which was informed by Phase 1 and the literature review. The qualitative data were analyzed

by multiple researchers using consensus coding.

Both qualitative studies followed the phenomenological tradition in qualitative inquiry

which views the subject through the eyes of the participants (Dowling & Cooney, 2012; Flood,

2010; Hays & Singh, 2012; Lala & Kinsella, 2011; Starks & Trinidad, 2007). Interviews were

recorded and transcribed. The researcher listened to the recordings and approached the

transcriptions with openness to whatever patterns and themes emerged. Bracketing was used

to set aside prior knowledge and assumptions; a code book was used for documentation and

field notes were reviewed (Dowling & Cooney, 2012). Consensus coding increased

trustworthiness; three researchers coded the data which resulted in 100% agreement across

categories (Hays & Singh, 2012).

In addition to the interviews and survey, unobtrusive data was collected from the

resource page of the city website, triangulating the data to enhance the conclusions (Leedy &

Ormrod, 2013).

Definition of Terms

The following terms are defined for clarification:

Entrepreneur: a business owner who organizes and manages any enterprise, usually with

considerable initiative and risk ("Small business development centers," 2015).

Public Agencies: government agencies that provide assistance to small businesses and

aspiring entrepreneurs throughout the United States ("Small business development

centers," 2015).

Public Services: government sponsored services available for business owners, including low

cost training and free consulting ("Small business development centers," 2015).

Resources: knowledge and tools businesses need to grow and expand ("Small business

resources," 2015).

Small business: firms with 1-499 employees ("Small business facts," 2015).

Summary and Overview of Chapters

The problem of this study was to encourage entrepreneurship by identifying the

resources that support business startup and growth. The assumption was that most

entrepreneurs are unaware of free or low cost services and resources offered by the

government that can enhance business growth. This study consists of five chapters. The first

chapter presents the problem, states the research questions, and outlines the background and

significance. Chapter II will establises a theoretical foundation for the research questions by

reviewing the literature related to the history of entrepreneurship education and research and

elements of small business success, including personal skills; financial, human, and social

capital; public and private resources; and awareness of public resources available. Chapter III

describes the methods and procedures used to gather data for the study, the population

studied, and methods of analysis. Chapter IV presents the findings of this study and describes

the research data in further detail. Chapter V provides a summary and draws conclusions about

the factors influencing entrepreneurs to seek resources from government agencies and lists

recommendations to support future studies based on these conclusions.

CHAPTER II

Literature Review

Chapter II includes a review of existing literature related to the research problem and the

purpose of the mixed method study. The chapter begins with the history of entrepreneurship

education and research and modern approaches for entrepreneurship education. Elements for

startup success are explored and include personal skills; financial, human, and social capital;

and support available for small businesses.

Entrepreneurship Education and Research

Business education emerged in the late 19th century after what Kaplan (2014) calls the

“trade school or vocational era”. (p. 10-11). The first business school in the US was The

Wharton School of Finance and Commerce, established in 1881 and was influenced by

Frederick Taylor’s (1911) scientific management or production efficiency (Thomas, 2013).

Development was slow for business schools because the liberal arts schools of the era were not

accustomed to practical education; resulting in “problems between the arts and science faculty

and the business school” (Van Fleet, 2005, p. 44).

Origins of Entrepreneurship Education. The earliest form of entrepreneurship

education was part of the agricultural extension of the land-grant colleges at the end of the

nineteenth century and was founded on the idea that college educated farmers could become

more productive and prosperous (Katz, Roberts, Strom, & Freilich, 2014). It took more than 50

years for the business schools to offer something comparable; the first course for

entrepreneurs, “Management of New Enterprises”, was taught at Harvard in 1947 (Katz, 2003).

The first MBA small business course “Small Business Management” was offered at Stanford in

1954 and the first undergraduate concentration in entrepreneurship wasn’t offered until 1968 at

Babson College when there were fewer than 10 universities offering courses in the nation (Katz,

2003).

During this time, the focus in American business was on the large corporation, which

was believed to create the majority of jobs. In the view of economic development, small

business was not thought to be important in job creation. Only 16 schools taught

entrepreneurship classes in 1971, 15 of which were at the graduate level (Vesper, 1971). It

wasn’t until a report was published in 1979 that the government acknowledged the importance

of small businesses in the economy (Burlingham, 2012). Examining data from Dun &

Bradstreet, David Birch (1979) found that small businesses (with fewer than 20 employees)

were job-generating companies and created as many new jobs as large-scale firms (with over

500 employees). This was a new concept because until then, the focus was on large

organizations.

Yet, there still was a lack of consensus on whether entrepreneurship should be offered

as a major. Hills (1988) called entrepreneurship an evolving field that was in “the embryotic

stage”, noting minimal commitment of university teaching as academia was “awakening” to the

void in knowledge (p. 110). In the 1980’s, new conferences, scientific journals, and professional

organizations were established by individual scholars. The first journal to focus on

entrepreneurship, The Journal of Business Venturing, was launched in 1985 and included an

essay by President Ronald Reagan (the editors included a footnote stating that the essay “had

not been peer-reviewed”) (Aldrich & Yang, 2014, p. 1244). This is the same year that Peter

Drucker published his seminal work Innovation and Entrepreneurship, which legitimized

entrepreneurship as a business school subject.

By 1986, there were 253 colleges or universities with courses in small business or

entrepreneurship, and fewer than 50 schools with undergraduate programs (Vesper & Gartner,

1997). Most of the courses offered focused on small business management. In 1987, the

Academy of Management recognized entrepreneurship as a formal field of study (Hindle, 2015).

These events led to enormous growth in entrepreneurship research in the 1990’s (Landström,

Harirchi, & Åström, 2012, p. 1156). Today, the field has expanded beyond a small group of

scholars to include a global research community focusing on new firms and high growth

industries (Aldrich, 2012).

The research component in entrepreneurship education is still considered an emerging

field, with about a 30 year history (Landström et al., 2012) and has been identified as

fragmented and widely dispersed (Fayolle, 2013). Much of the early research centered on

developing theories to explain the types of entrepreneurs and in the past decade, the focus has

shifted to emphasize the consequences of actions (Aldrich & Martinez, 2001).

Modern Entrepreneurship Education and Training. At the undergraduate level,

entrepreneurship is one of the fastest growing subject areas (Schramm, 2008) and there is a

movement to teach entrepreneurship in a university-wide model that offers courses in different

colleges within a university, showing students how one discipline helps another. Called Cross

Campus Entrepreneurship Education (CCEE), it commits to promoting entrepreneurship

“everywhere in the university” (Katz et al., 2014, p. 29). This model has seen opposition from

some liberal arts academics, (Baldwin & Baker, 2009), yet it supports research indicating that

business schools need to teach creativity to meet today’s challenges in business (Baker &

Baker, 2012; Robinson & Stubberud, 2014). This model also employs the proper learning

strategy for practitioners that makes a difference in learning outcomes because entrepreneurs

learn by “doing”. For example, Ireland & Webb (2007) built a system of games to teach soft

skills missing in formal programs for entrepreneurs, such as networking and creativity. Because

there is no single approach that works in every institution, higher education campuses build their

own programs or “ecosystems” and can include classroom instruction, business plan

competitions, co-curricular learning programs with internships, clubs and lectures, and

association with business incubators, accelerators, and mentoring programs (Torrence et al.,

2013).

There are also some differences in nascent entrepreneur startup practices that business

school textbooks need to address. Edelman, Manolova, and Brush (2008) discovered a gap

between the education programs and what entrepreneurs actually practice. The concern is the

time lag to create new courses in universities; by the time new topics are approved, business

owners may have additional challenges that should be addressed. Today, new programs are

finding positive results when developing partnerships with industry professionals and also by

adding the distance learning component (Hegarty, 2006).

Although ongoing education can help business owners grow their enterprises, training

has a higher value with startup firms than with established companies (Gruber, 2007) and

outside assistance during the startup phase can significantly influence survival rates of new

ventures (Chrisman & Ed McMullan, 2000) and financial performance (Katz et al., 2014).

Human capital, external networks, and resources, are identified by Honig (2001) as essential to

training programs to address the need to be flexible and adaptive to the business environment

when planning entrepreneurial learning strategy and activity.

Conceptual Framework: Elements of Business Success

Nascent entrepreneurs are individuals who are actively involved in setting up a new

venture (Parker & Belghitar, 2006). Access to information affects founders’ decision to start a

venture (Vivarelli, 2004), and complexities perceived by new founders hinder the decision for

business entry when individuals lack relevant information (Van Der Zwan, Verheul, Thurik, &

Grilo, 2013). Though many would-be entrepreneurs spend time thinking about starting a

business, individuals who aggressively pursue startup activities (i.e. organizing a team,

preparing a plan, and looking for facilities and equipment), to make their business tangible are

more likely to actually start rather than give up (Carter, Gartner, & Reynolds, 1996). Elements

for startup success and business growth include personal skills, capital (financial, human, and

social), public or private business resources (see Figure 1).

Figure 1. Conceptual Framework: Elements of small business success.

Personal Skills. These entrepreneurs who start new, independent businesses lack the

support of a sponsoring organization, which can shelter the new firm from factors that hinder

startup success and later, growth. Owners must rely on their own interpersonal and personal

Personal Skills

Optimism

Cognitive Bias

Confidence

Capital

Financial Capital

Human Capital

Information

Industry Experience

Social Capital

Networks.

Business Planning

The Business Plan

Mentors

Public and Private Support

Public Resources

Economic Development

SBDC's

Incubators

Private Resources

Local Organizations

Accelerators

Helpful for

Business

Startup and

Growth

Elements of Business

Success

skills to handle unexpected challenges that face new businesses and because they have

incomplete information, they make strategic mistakes in the startup process or in their early

years of operation which may lead to business closure. Without the safety net provided by a

parent company, young firms face constraints of newness and lack of legitimacy, which is

intensified in innovative technical firms (Aldrich & Fiol, 1994).

Optimism. Most individuals who start businesses believe they have the talent,

knowledge, and skills to be successful, and entrepreneurs exhibit dramatically higher levels of

overconfidence bias than typical business managers and tend to categorize their business

situations positively (de Meza, 2002; Palich & Bagby, 1995). According to Ucbasaran,

Westhead, Wright, and Flores (2010), even serial entrepreneurs who have experienced

business failures exhibit higher confidence than the norm, calling it comparative optimism. The

high degree of optimism leads entrepreneurs to expect their odds for success to be substantially

high (Frankish, Roberts, Coad, Spears, & Storey, 2012; Koellinger, Minniti, & Schade, 2007),

and makes individuals more likely to take risks and start new ventures (Townsend et al., 2010).

Cognitive Bias. Entrepreneurs, more than the general public, are more apt to focus on

the future and are susceptible to cognitive bias (Forbes, 2005), particularly the self-serving bias

where individuals give themselves credit for positive outcomes and blame others for negative

events (Baron, 1998) and decision bias, where people are less cautious than the norm (Arenius

& Minniti, 2005; Busenitz & Barney, 1997). In decision making, entrepreneurs gather less

information, are less likely to use formal techniques to solve problems, and are less rational

than managers (Markman & Baron, 2003).

Busenitz and Barney (1997) coined the term “entrepreneurial cognition” to explain

cognitive factors, or biases, that are characteristic of entrepreneurs. These cognitive biases can

lead entrepreneurs to underestimate risks by discounting uncertainty and negative outcomes

(Simon, Houghton, & Aquino, 2000). These biases that can lead to the overestimation of

success during startup, they also enhance the ability to develop necessary positive relationships

that advance business growth, such as the ability to convince customers that the new product

will be successful and to enlist support from investors (Vecchio, 2003).

Confidence. Thinking positively fosters motivation and entrepreneurs who practice goal

setting are more likely to start their ventures (Gielnik et al., 2014). But confidence is not a

product of education or preparation in starting a new venture. Cooper, Woo, & Dunkelberg

(1988) found that both well-prepared and poorly prepared individuals were equally optimistic.

Because they chart their own paths, entrepreneurs can make irrational choices (Bernardo &

Welch, 2001). Overconfidence leads nascent entrepreneurs to overestimate their first year

sales (Cassar, 2010), and has a negative correlation with business survival in the long run

(Koellinger et al., 2007). An entrepreneur’s human resource profile can greatly affect the

success or failure of a firm; industry experience can act as a moderator and give new

entrepreneurs an advantage for setting realistic goals (Cassar, 2014).

Capital: Financial, Human, and Social. Aldrich (2001) identified three essential

elements for an entrepreneur’s success: financial, human, and social capital.

Financial Capital. Having sufficient financial capital in the startup phase is widely

acknowledged as necessary for business survival (Baron, 2014; Fernández-Guerrero, Revuelto-

Taboada, & Simón-Moya, 2012; Gelderen, Thurik, & Bosma, 2005; Granger & Sterling, 2012;

Honig, 1998; Miles, 2013). Smaller businesses tend to have less capital at startup than larger

businesses (Curran, 2000).

Human Capital. Human capital focuses on the knowledge and ability of the

entrepreneur as well as previous experience, which also contributes to business growth (Jo &

Lee, 1996; Van Praag & Versloot, 2007). Human capital includes information and industry

experience.

Information and Training. Because entrepreneurs must learn significantly faster (than

non-entrepreneurs) to react to business ownership challenges, knowledge is as imperative as

capital (Aldrich & Martinez, 2001).There are informational limitations due to new venture novelty

and founder ignorance increases business mortality risk (Shepherd, Douglas, & Shanley, 2000;

Simmons, 2007). Therefore, business survival is strongly linked to human capital, where owner

education plays a large role (Bates, 1990; Kim, Aldrich, & Keister, 2006); human capital

acquired through education is significantly associated with entrepreneurship performance

(Millán, Congregado, Román, van Praag, & van Stel, 2014). Founders can obtain knowledge

and information through previous experience, formal education, or informal training (van Praag,

2003).

Industry Experience. The success of a small business depends on the efforts of the

owner-manager (or partners), who must carve out a niche for the new entity. Though

entrepreneurs tend to be well educated, the majority don’t come straight from business school

or from a family of entrepreneurs; they have experience within their industry (Wadhwa,

Aggarwal, Holly, & Salkever, 2009). Experience in an industry is positively correlated with

success in new ventures and is actually a better predictor for an entrepreneurs’ success

(Alasadi & Al Sabbagh, 2015; Kim, Aldrich, & Keister, 2006; van Praag, 2003). Previous work

experience, or learning by doing, provides a basis of knowledge for entrepreneurs but learning

through education and training in addition is also useful because many businesses fail due to

lack of preparation (Aldrich & Yang, 2014).

Social Capital. Social capital, described as relationships with individuals, networks,

communities, has a higher value than human capital, (Liao & Welsch, 2003). These include

formal and informal networks, business planning, the development of a business plan, and

mentors.

Networks. Knowing other entrepreneurs has a positive impact on the founders’

perception of starting a business (Arenius & Minniti, 2005). Formal business networks,

consisting of bankers, accountants, and lawyers, exist in every community and provide

opportunities for guidance. Entrepreneurs’ formal and informal networks can substantially

influence the nature of their new venture. Most individuals rely on family, friends, and business

contacts in the informal network (Henderson, 2002) and are preferred as mentors (LeBlanc,

2013). These formal and informal network contacts provide a key source of information and can

also occur within the newly formed venture. Business owners benefit from strategic alliances

and diverse information exchanges that result from balanced networks representing diversity in

the players. Membership in formal business networks such as the Chamber of Commerce or

Rotary Club are strong predictors of firm emergence (Davidsson & Honig, 2003) and

policymakers are increasingly promoting business networks to strengthen the economic health

of local communities (Besser, Miller, & Perkins, 2006). Support from friends and family has a

great impact on business survival, although this has a small impact on sales growth (Hoang &

Antoncic, 2003). Communities of practice also play a leading role in social networks for

business owners by meeting the learning needs and aiding professional development

(Campana, 2014). Government training programs can integrate social networks through peer-

to-peer learning that create high trust and support participants by providing an opportunity to

develop relationships with other entrepreneurs (Gordon, Hamilton, & Jack, 2012). Peer learning

Business Planning. To discover, diffuse, and employ informed action for firm survival,

risk taking and a professionally planned founding process were significant predictors of new

venture survival in one study (Kessler, Korunka, Frank, & Lueger, 2012). The use of

professional advisors is affected by education level and is enhanced by the development of a

business plan, and new founders seek more network contacts for assistance.

The Business Plan. The most widely used teaching tool for emerging business owners

is the business plan, which is the principle means for investors to screen new businesses and

make decisions on their potential to survive. The most common approach for education in

entrepreneurial training focuses on writing one (Lange, Mollov, Pearlmutter, Singh, & Bygrave,

2007) and some research shows a correlation to business continuance when entrepreneurs

complete them (Shane & Delmar, 2004).

On the contrary, there is debate among scholars about the significance placed on the

business plan’s importance. Studies have shown that business plans alone are not an

indication of future success in a new venture (Diochon, Menzies, & Gasse, 2005; Fernández-

Guerrero et al., 2012; Gibson & Cassar, 2005) and business educators place too much

emphasis on writing a comprehensive plan (Lange, Mollov, Pearlmutter, Singh, & Bygrave,

2007). Honig & Karlsson, (2004) found no relationship between profitability in companies that

had written a formal business plan from those that had not, two years after founding. While

business plans are produced in most cases to obtain funding (Lange et al., 2007), few

entrepreneurs use them as a tool for ongoing guidance in their business operations. Karlsson

and Honig (2009) found that firms do not follow their formal business plans over time and

owners who write them rarely revisit the document after opening their business. In addition,

business planning might actually have a negative performance consequence for a firm; only

40% of the INC 500 companies surveyed in 2002 had a formal business plan and of those

respondents, 65% said they had strayed significantly from their original conception, adapting

their plans to the changing business environment as they went along (Karlsson & Honig, 2009).

While the business plan alone will not indicate more potential for success; they are

recommended specifically for entrepreneurs that are seeking capital from investors (Lange et

al., 2007). They are also helpful for nascent entrepreneurs making a decision to enter the

market, as they shed light on financial and marketing concerns (Chwolka & Raith, 2012) and

point to changes that should be considered before starting a business. Some researchers

suggest that well-written business plans may improve a venture’s chance of survival and lead to

growth. Mainprize and Hindle (2007), studied the common methods used by investors to

measure performance of new ventures and tested the quality of writing in an entrepreneur’s

business plan and found three business plan writing principles that significantly improved the

likelihood of a new business achieving successful performance; they provide a full description of

(a) the opportunity, (b) the entrepreneurial team, and (c) multiple plausible future scenarios

(from best case to worst case).

When compared with 11 other factors that might contribute to a business’ success, the

business plan was deemed the least important factor in Calvo’s (2010) study. Experience had

the greatest impact, followed by environmental perception (attitude), resilience, and financial

resources. Completing business plans and establishing legal entity early in the startup process

can be beneficial for new ventures (Delmar & Shane, 2004; Gruber, 2007), but entrepreneurship

education and training plays a greater role in business success than the establishment of a

formal business plan (Fernández-Guerrero et al., 2012). Because the business environment is a

volatile place, (Gruber, 2007) teaching practices should embrace an “adaptive toolkit” that may

include a business plan for those who need it.

Mentors. For those with less experience, mentors have proven to increase the chance

of a firm’s success; Gelderen, Thurik, & Bosma (2005) found that even those with limited

industry experience had a better chance of success when coupled with education and guidance.

Entrepreneurs are experiential learners (Pepin, 2012; Rae & Carswell, 2000), and mentors can

guide business owners by providing meaning to experience (Sullivan, 2000) because small

business mentors are experienced practitioners who can give insight to fledgling entrepreneurs.

Wiens 2014) suggests that municipalities can create public programs to assist entrepreneurs

with network formation, provide peer learning opportunities, and offer mentorships.

Public and Private Resources. Understanding the importance of small business

survival and growth, the government supports entrepreneurs through the Small Business

Association (SBA), providing information resources and education. Created in 1953 to preserve

free enterprise and protect business concerns, their mission is to “help Americans start, build

and grow businesses” ("Mission statement," 2015). In Virginia Beach, these services are

provided through the office of Economic Development and the Chamber of Commerce together

with their partnership with Tidewater Community College. Throughout Hampton Roads, private

organizations also exist that support entrepreneurs.

Public Resources. Small businesses are known to have large failure rates; some

believe this is attributed to the thought that nascent owners don’t know what they‘re doing

(Drucker, 1985). Publicly funded opportunities offering valuable insights already exist for

entrepreneurs in local communities. In a longitudinal study of client participation with SBDC

counselors, Chrisman & McMullan (2004) found a significant positive relationship with business

survival among owners who received counseling during startup. Additionally, guided preparation

provided by SBDC counsellors resulted in growth in sales and employment in businesses 3-8

years after inception (Chrisman et al., 2005).

The Department of Economic Development. Departments of Economic Development

exist to improve a community’s general quality of life and economic health by implementing

strategies to grow business (Chrisman, Holbrook, & Chua, 2002; "Virginia Beach department of

economic development," 2016). The Virginia Beach Department of Economic Development

conducts marketing outreach events to bring new businesses to the area, provides assistance

to local businesses for expansion, and operates a division for minority and woman-owned

businesses (SWaM). While the focus for many initiatives tends to lean toward larger

businesses, policymakers should concentrate on developing small, local, and independent

sectors to maximize the economic health of an area (Gomez et al., 2015). Departments of

Economic Development exist to help companies grow, yet many government employees

“misunderstand entrepreneurship” and governments are known to “inhibit business activity”

(Feld, 2012, p.35-36).

Small Business Development Centers. Small Business Development Centers (SBDCs)

have been in existence since the late 1970’s and within 20 years were present in all 50 states

(Chrisman et al., 2002). Local SBDCs, funded in part by the SBA, provide free and low cost

consulting and training services through local universities and economic development offices.

SBDCs help business owners develop business plans and financial packages, conduct market

research and deliver guidance on healthcare and government contracting ("Small business

development centers," 2015). They offer counseling and training for entrepreneurs in

accounting, marketing, business planning, management, and legal aspects. Though they will

consult with everyone, they emphasize women, minorities, veterans, and people with special

needs (Barclay, 2009, p. 14) and assist startups as well as existing businesses who are trying to

expand or struggling to survive. The SCORE Association (Service Corps of Retired Executives)

is a network of seasoned entrepreneurs who provide free business advice and counseling for

entrepreneurs. Unlike the paid employees of the SBDC, SCORE members volunteer their time

to counsel business owners (Phillips, 2014). In Hampton Roads, SCORE has offices in Norfolk

and Virginia Beach ("SCORE," 2016).

The free services offered are appreciated by entrepreneurs because there are few

alternatives; in one study, 80% of entrepreneurs surveyed felt that they could not have found

comparable quality mentoring at an affordable rate (Chrisman & Katrishen, 1994). But research

shows that the services are underutilized. In a study conducted in a community in Indiana,

Birley (1985) found that public sources were hardly used due to ignorance of their existence.

Incubators. A common program used to develop entrepreneurs is the business

incubator, where marketing, management, and technology support is provided to multiple

businesses who share a single location. Incubators target early stage companies and help

emerging business owners develop a community and assist them to become financially viable

(Henderson, 2002). While some of these programs are sponsored by academic institutions or

nonprofit organizations, others are fostered by local governments, included in the economic

development investment strategy (Hires, 2010; Pappano, 2012). Renski’s (2008) study found

strong entrepreneurial performance primarily in suburban areas and small cities, where the high

number of entrants had the lowest failure rates. The International Business Innovation

Association (IBIA) lists 12 U.S. State Incubation Associations that have varying presences on

the web ("U.S. State incubation associations", 2016). To date, the most successful incubators

are located in cities known for tech innovation and the rate of success can be as high as 90%,

compared to 44% of companies who start businesses without support (Sapinsley, Becker, &

Kuyan, 2016; Smith, 2010).

University and Other Organizations. The ODU Business Gateway, located in Norfolk,

supports several programs to assist business owners to start or grow their companies

("Business gateway," 2016). They sponsor special programs that target women with the

Women’s Business Center and veterans with the Hampton Roads Veterans Business Outreach

Center. Launch Hampton Roads assists aspiring entrepreneurs to start businesses and create

self-employment through training and collaboration with other area services. The Hampton

Roads Procurement Assistance Center focuses on businesses owned by minorities, women,

and service disabled veterans to assist in owners to make competitive bids for government

contracts ("Hampton Roads procurement assistance center," 2016). The newest operation at

the ODU Gateway, GOV2COM, was developed in response to sequestration to assist small

government contractors in making the transition to commercial markets (E. Dietzman, personal

communication, February 10, 2016).

Private Resources

Accelerators. While incubators assist new entrepreneurs in the first stages of business

ownership, business accelerators can take the enterprise to the next level of success. They

differ from incubators in that they offer intense mentorship for a short period of time (typically 3-

6 months) and are usually funded by small-scale or angel investors who offer pre-seed money

in exchange for company equity (Pauwels, Clarysse, Wright, & Van Hove, 2015). Because they

foster entrepreneurship, accelerators should be developed and supported by local stakeholders

(Hathaway, 2014).

Private Organizations. There are private organizations in cities and counties throughout

the nation that provide assistance for entrepreneurs (Gomez et al., 2015). The Kauffman

Foundation sponsors 1 Million Cups (1MC) in Virginia Beach. 1MC is a network of cities

throughout the country that provide pitch opportunities and feedback for new companies.

Founded in 2012, there are 77 1MC Communities in the United States (as of January 2016).

Each Wednesday morning, one or two entrepreneurs pitch their ideas. Founders have six

minutes to present their business, followed by 20 minutes of feedback and questions from an

audience of mentors, peers, educators, and business advisors ("1MC," 2016; "Virginia Beach

starts 1 Million Cups," 2016). Participation is free and the organizers are volunteers. The

supportive culture provides education for nascent business owners and networking

opportunities to connect them with “trustable information” from other entrepreneurs (Stafford,

2013).

StartWheel is a relatively new private organization based in Hampton Roads that was

developed by 757 Angels to assist entrepreneurs. 757 Angels is ‘the first & only organized

angel group in Hampton Roads” ("757 angels," 2016). The focus is to provide training

resources and to connect nascent business owners with mentors. They aim to consolidate all

the local entrepreneur resources on their website to make it seamless for new business owners

to network with the right people or organizations.

Hatch is a business incubator located in Norfolk, a neighboring city. Started by Zach

Miller, Hatch offers free online business resources and holds weekly seminars featuring local

entrepreneurs. The City of Norfolk assists Hatch by providing the space for their operation.

Promoted as “for entrepreneurs by entrepreneurs”, Hatch provides mentorship and access to

additional training material to individuals who join 1000 Four and pay a monthly fee (B. Sheavly,

personal communication, February 2, 2016).

Availability of Public Resources and Awareness. Entrepreneurs who receive help

from outside experts, whether from universities, educational programs, or SBDCs, tend to have

better survival rates (Katz et al., 2014). Creating an entrepreneur-friendly environment is critical

for the economic health of a city and some local governments aspire to portray a welcoming city

environment for aspiring entrepreneurs and business owners looking for expansion

opportunities.

Recently, the Kauffmann Foundation conducted a national Small Business Friendliness

Survey with 7,766 participants from very small businesses (Allen & Daniels, 2013). Assigning

letter grades for performance, the survey asked participants to rank their city on “friendliness”

with questions about fair taxes, training and networking programs, zoning regulations, and state

support of business owners. Of the 53 cities ranked, Virginia Beach scored second in

“business-friendliest” cities, but city officials should be careful before putting too much stock in

the results because their sample of entrepreneurs did not mirror the business population of the

city. For Virginia businesses, there were no responses from either the manufacturing or

wholesale sectors, service providers were over-represented (75% of the participants, versus

57% nationally), and retail stores were underrepresented (1% of the participants, versus 11%

nationally). According to the researchers, training and networking programs were significant

indicators for business friendliness and in this survey overall, small business owners’ awareness

of public training programs raised their cities’ scores by an average of 10 percent (Eddy, 2014).

In this category, Virginia Beach earned a B- and ranked 29th.

It is difficult to establish awareness for public support programs for entrepreneurs

(Curran & Blackburn, 2000) and several studies indicate that low levels of awareness prevented

participation in these programs (Audet & St-Jean, 2007; Birley, 1985; Shabaya, 2014).

Municipalities should address this issue and also develop or support programs for small

businesses that are “more business friendly” (Shabaya, 2014, p. 82).

Summary

Chapter II reviewed the literature related to the research problem including the history

and modern approaches of entrepreneurship education and research. Elements for startup

success and business growth were examined and included personal skills, capital (financial,

human, and social), and public or private business resources. Availability and awareness of

resources for entrepreneurs was also discussed. The literature review resulted in a conceptual

framework which guided the development and implementation of Phase 1: interviews with

startup entrepreneurs, Phase 2: survey of business owners, and Phase 3: interviews with

entrepreneurs who used public resources.

CHAPTER III

Methods and Procedures

Mixed method design was used for the three-part study. Blending qualitative and

quantitative research produces usable knowledge in creative ways to fit within a contextual,

interpretive framework Yanchar (2006). The use of quantitative data alone can be narrowly

constrained, one-dimensional and overly restrictive (Dawson, Fischer, & Stein, 2006); therefore,

the collection of both quantitative and qualitative data brings together the strengths of both

forms of research and enhances the quality of conclusions by presenting contextualized, useful,

and balanced results (Behar-Horenstein, 2010, pp. 578-579) and reflect the participants’

perspective in order to obtain a richer response and generate new ideas (Abusabha & Woelfel,

2003).

Figure 2. Mixed method process model in the study of small business startup and growth.

Literature Review and

Development of Conceptual

Framework

Interviews with Group 1

Entrepreneurs and Website Observation

Model 1

VB Small Business Survey

Model 2

Interviews with Group 2

Entrepreneurs

Model 3

Development of Final Model

The literature review resulted in the development of an initial model that identified

elements of success for small business startup and growth. Review of the literature also

served in the development of the protocol used in Phase 1: interviews of entrepreneurs.

Construct that were discovered in the Phase 1 results guided development of survey items used

in the instrument for the second, quantitative phase (Creswell, Plano-Clark, Gutmann, &

Hanson, 2003; Leedy & Ormrod, 2013). Qualitative data was sought for the third phase of the

study to confirm the phenomenon discovered in the Small Business survey results. This

process is illustrated in Figure 2.

This chapter describes the procedures used to answer the following research questions:

RQ1: What are entrepreneurs’ informational needs for business startup and growth?

RQ2: What resources do entrepreneurs seek and use before starting up a new business?

RQ3: To what degree do entrepreneurs perceive Virginia Beach as helpful in the process of

small business startup in the city?

RQ4: To what degree do entrepreneurs perceive Virginia Beach as supportive to small

business expansion?

RQ5: To what degree do entrepreneurs utilize training services offered by the city?

RQ6: What type of training workshops would entrepreneurs want to attend?

RQ7: What resources and assistance should public agencies offer that support

entrepreneurship?

The sample populations, research variables, instruments, procedures, methods of data

collection, and statistical analyses for the qualitative and quantitative studies are described in

this chapter.

Sample

The population the mixed methods study consisted of small business located in Virginia

Beach. All of the participants volunteered to participate in the study without incentive.

Phase 1: Qualitative

The sample for the first phase included 10 entrepreneurs. Targeting individuals with

certain characteristics (Markova, Perry, & Farmer, 2011), a purposeful and convenient sample

was used to identify entrepreneurs operating businesses in Virginia Beach. According to

Creswell (2007), interviewing 5-25 individuals for a phenomenological study adequately

represents the population (pp. 61-62). Multi-method studies that focus on a purposeful sample

fills gaps in entrepreneurship literature (Naia, Baptista, Januário, & Trigo, 2014) and have been

encouraged by business network researchers (Hoang & Antoncic, 2003).

The researcher used criterion sampling to select businesses who had recently opened a

business in Virginia Beach and had a brick and mortar presence. Five different types of

business were identified for data collection for the first phase: four retail stores (menswear,

womenswear, one gift shop, and one lifestyle store), three restaurants (Italian, seafood, and

pizzeria), a hair salon, a health service provider, and a fitness operation.

Phase 2: Quantitative

The quantitative phase of the study included entrepreneurs with small businesses

located in Virginia Beach. Because the city did not have an email database for the

approximately 22,000 businesses in the city, Economic Development and members of the Small

Business Subcommittee provided email lists of small businesses in their business networks and

invited approximately 5200 entrepreneurs to take the survey posted on Survey Monkey. A total

of 349 individuals responded and completed the survey for a response rate of 6.7%.

Phase 3: Qualitative

The sample for the third, qualitative, phase included a population of 13 entrepreneurs

with businesses in the city. Continuing with the phenomenological tradition, the researcher used

criterion sampling to select entrepreneurs who used public resources for startup and growth

assistance. Identified by Virginia Beach Economic Development and members of 1MC,

3 0

Table 1.

Phase 1: Protocol for Interviews with Entrepreneurs

Literature Website Observations

VB SBS

Themes Interview Protocol Questions

Aldrich & Yang, 2014 Birley, 1985 Chwolka & Raith, 2012 Karlsson & Honig, 2009 Lussier, 1995 Delmar & Shane, 2003 Vivarelli, 2004

Business Planning

Public resources for small business

Social capital

Did you seek information on how to open and operate a business before making your decision to start up your business?

Henderson, 2002 Hoang & Antoncic, 2003

Social capital

Networks

a) Where did you find the information/resources?

Acs, Desai, & Hessels, 2008 Birley, 1985

XX Government supports business startup

Did you go to the City of Virginia Breach website? If so, how navigable was it?

Aldrich & Martinez, 2001 Chien-Chi, 2013

Training Have you sought more information since opening your business?

XX Government supports business startup

How helpful was the city of Virginia Beach in helping you establish your business?

Acs, Desai, & Hessels, 2008 Birley, 1985 Chrisman & McMullan 2004

XX Public resources for small business

Did you consider contacting economic Development for assistance?

Acs, Desai, & Hessels, 2008 Birley, 1985

XX Public resources for small business

How about the SBDC? , are you aware of their programs?

Delmar and Shane, 2003 Liang and Dunn, 2012

Public resources for small business Training

Now that you’ve started up your business, what information/resources do you wish you’d had before starting your business?

XX What kind of barriers, if any, did you encounter in opening [or expanding] your business?

XX What recommendations would you make to the City of Virginia Beach to help them improve business entry and growth?

participants included individuals from various businesses in the city including two

manufacturers, three retailers, four professional/training businesses, one digital streaming

business, a technology company, and two consulting firms.

Protocol and Survey Development

Phase 1: Qualitative

Data were collected during individual interviews using a questionnaire designed

specifically for this study. Before conducting the interviews, unobtrusive data were collected

from the Small Business Resource page of the Virginia Beach website to provide insight. The

development of the interview protocol for the first phase of the study was informed by the

conceptual framework which emerged from the literature review, website observation, and

discussion with the subcommittee members (Saldaña, 2013).

Questions were developed to address the themes that emerged: the importance of

human and social capital, information and training, business planning, and public resources to

support business startup that are available for entrepreneurs. Two questions were added after

meeting with the SBS to inform the second phase of the study; the members were concerned to

know what the city can do to help make the process smoother for entrepreneurs opening up a

location in Virginia Beach (Table 1). The questions for the survey were designed to answer the

first two research questions:

RQ1: What are entrepreneurs’ informational needs for business startup and growth?

RQ2: What resources do entrepreneurs seek and use before starting up a new business?

Background questions were asked to identify the type of business and how long it had

been in operation. Questions were included in the interview to discover how participants

sought, found, and used resources before opening their business. The review of the Virginia

Beach website prompted questions to discover whether business owners went there for

information and/or found it helpful. Additional questions asked if the City was helpful for

3 2

Table 2.

Phase 2: Virginia Beach Small Business Survey

Literature Website Observations

VB SBS

Phase 1 Interviews

Themes Survey Questions

Davidsson & Honig, 2003 Honig 2001 Liao & Welsch, 2003

XX XX Networks, Formal Social capital

Before I opened my business I contacted ___ , check all that apply for guidance:

a) A banker, lawyer, and/or an accountant

Chrisman & Katrishen, 1994 Chrisman & McMullan, 2004 Liao & Welsch, 2003

XX XX XX Public resources for small business

b) The city of Virginia Beach

Gelderen, Thurik, & Bosma, 2005 Liao & Welsch, 2003 O'Connor, 2013

XX Mentors Social capital

c) A mentor

Davidsson & Honig, 2003 Liao & Welsch, 2003

XX Networks, Formal Social capital

d) Industry associations

Davidsson & Honig, 2003 Henderson, 2002 Hoang & Antoncic, 2003Liao & Welsch, 2003

XX Networks, Informal Social capital

e) Business associates/friends

Alasadi & Al Sabbagh, 2015 Calvo, 2010 Cassar, 2014 Jo & Lee, 1996 Kim, Aldrich, & Keister, 2006 van Praag, 2003 Wadhwa, Aggarwal, Holly, & Salkever, 2009

XX Industry Experience Human Capital

Before I opened my business I had previous experience working in the same industry.

3 3

Table 2. (Continued)

Literature Website Observations

VB SBS

Phase 1 Interviews

Themes Survey Questions

Aldrich, 2001 Gadenne, 1998

Elements for startup success

The biggest challenge I had to overcome to start my business was getting capital/funding.

Aldrich, 2001 Gadenne, 1998

XX Elements for startup success

The biggest challenge I had to overcome to start my business was finding qualified employees.

XX XX Elements for startup success

The biggest challenge I had to overcome to start my business was finding information regarding government requirements or city regulations, permits, licenses, taxes, or zoning.

XX Elements for startup success

The biggest challenge I had to overcome to start my business was finding a cost effective location.

XX Government supports business startup

City employees are helpful and receptive to working with small businesses.

XX XX Government supports business startup

Virginia Beach outlines clear steps for a streamlined process in opening a business in the city.

XX XX Government supports business startup

I was able to locate all the information that I needed on the VB website.

Birley, 1985 Kedia & Chhokar, 1986 O'Connor, 2013

XX XX City services for startups

I am aware of services that the city offers to assist business owners to open a business.

3 4

Table 2. (Continued)

Literature Website Observations

VB SBS

Phase 1 Interviews

Themes Survey Questions

Birley, 1985 Kedia & Chhokar, 1986

City services for

startups

Training

The city does a good job informing and encouraging businesses to use all of the private sector resources available for assistance in opening and operating a business.

XX Government supports business startup

I looked at other cities in the Hampton Roads area to open my business and found that VB offered more help in the process.

XX XX City supports small business growth

City departments and inspectors are more interested in assisting to achieve compliance than penalizing businesses.

Acs, Desai, & Hessels, 2008 Huggins, R. & Williams, N., 2011 O'Connor, 2013

City supports small business growth

I feel that the city encourages business expansion by offering incentives.

O'Connor, 2013

XX The city gives a preference for larger businesses over small businesses.

Acs, Desai, & Hessels, 2008 O'Connor, 2013

XX City supports small business growth

The department of economic development is aware of the impact on existing small business when they offer incentives for competing larger businesses.

O'Connor, 2013

XX City supports small business growth

The level of city administered taxes has inhibited the growth of my business.

3 5

Table 2. (Continued)

Literature Website Observations

VB SBS

Phase 1 Interviews

Themes Survey Questions

Acs, Desai, & Hessels, 2008 Delmar & Davidsson, 2000 Gelderen, Thurik, & Bosma, 2005 Gordon, Hamilton, & Jack, 2012 Lerner & Malmendier, 2013 Michaelides & Benus, 2010 O'Connor, 2013 Rauch, 2013

City supports small business growth Mentors Training

I feel that the city encourages business expansion by offering education or mentors.

Brinkmann, 2008 Chien-Chi, 2013 Kedia & Chhokar, 1986 Naia, Baptista, Januário, & Trigo, 2014 Ulvenblad, Berggren, & Winborg, 2013 Wiens, 2014

XX City supports small business growth Training

I would be interested in attending one or more of the following training workshops for business owners:

business startup and whether the participant used available public resources or experienced

barriers during startup. A final question asked what recommendations the interviewees would

offer to the city. Quantitative measures were not used in this phase.

Phase 2: Quantitative

The second phase of the study was informed by the literature review, Phase 1

interviews, observation of the Virginia Beach Website, and input from members of the SBS

committee. Questions were developed for the survey to address the themes that emerged:

industry experience, government efforts to support business startup and growth, formal and

informal networks, public resources for small business, elements for startup success,

helpfulness of city employees, and mentors (see Table 2).

Seventeen questions followed a Likert scale format ("strongly agree, somewhat agree,

neutral, somewhat disagree, strongly disagree") to measure participant responses. Two

questions allowed participant to select ‘all that apply” (multiple choice). Respondents were

asked what resource person(s) they contacted before opening their business and also what

training workshops they might be interested in attending. The respondents were required to

answer the first seventeen questions in order to submit the survey. The demographic and

multiple choice questions were voluntary. Two optional open ended questions allowed

participants to add additional information.

To enhance validity, the instrument was tested for content and face validity (Leedy &

Ormrod, 2013; Patten & Bruce, 2012). The first draft was reviewed by the subcommittee

members to get feedback and editing suggestions. Each member took the survey to identify

typographical errors and make suggestions for improvement. At the following committee

meeting, results were discussed. The questions were ordered and some were combined or

rejected. The amended instrument was tested for face validity on Survey Monkey by a 25

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Table 3.

Labels and the Related Research Question for Survey Analysis

RQ Survey Question Label

3 City employees are helpful and receptive to working with small businesses. EmpHelpful

3 Virginia Beach outlines clear steps for a streamlined process in opening a business in the city.

ClearSteps

3 I was able to locate all the information that I needed on the Virginia Beach website.

VBWebsite

3 I looked at other cities in the Hampton Roads area to open my business and found that Virginia Beach offered more help in the process.

OtherCities

4 City departments and inspectors are more interested in assisting to achieve compliance than penalizing businesses.

Inspectors

4 I feel that the city encourages business expansion by offering incentives. Incentives

4 The city gives a preference for larger businesses over small businesses. PrefLarger

4 The Department of Economic Development is aware of the impact on existing small business when they offer incentives for competing larger businesses.

ImpactLgBus

4 The level of city administered taxes has inhibited the growth of my business.

CityTaxes

5 I am aware of services that the city offers to assist business owners to open a business.

AwareServices

5 The city does a good job informing and encouraging businesses to use all of the private sector resources available for assistance in opening and operating a business.

InformEncourage

5 I feel that the city encourages business expansion by offering education or mentors.

EducMentor

business owners who reviewed the document and made suggestions to improve question

clarity. Corrections were discussed at the following SBS meeting, amendments were made,

and the final survey was approved. All participants remained anonymous.

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Proposed Constructs and Items.

Proposed research constructs and associated items were developed in response to the

research questions to answer the third, fourth, and fifth research questions (Table 3). Factor

analysis was conducted to test whether the survey items related to the intended constructs

(Tabachnick & Fidell, 2001, pp. 25-29). The constructs were also tested for reliability and

internal consistency using Cronbach’s Alpha.

RQ3: To what degree do entrepreneurs perceive Virginia Beach as helpful in the process of

small business startup in the city?

The dependent variable, “Perceived Helpful for Business Startup”, was computed with

the four questions associated with the RQ3 which asked if City employees were helpful, if clear

steps were outlined by Virginia Beach, if information was available on the Virginia Beach

website, and if Virginia Beach was more helpful compared to other Hampton Roads cities.

RQ4: To what degree do entrepreneurs perceive Virginia Beach as supportive to small

business expansion?

The dependent variable, “Perceived Supportive of Small Business Growth”, was

computed with the five questions associated with RQ4 which asked whether City departments

and inspectors were helpful, if the participant was aware of incentives offered by the city, if the

city preferred larger businesses over small businesses, if Economic Development was aware of

the impact of their decisions to support larger businesses, and whether city taxes inhibited

business growth.

RQ5: To what degree do entrepreneurs utilize training services offered by the city?

The dependent variable, “Public Resource Use”, was computed with the three questions

associated with the RQ5 which asked if the participant was aware of services the city offers to

assist business owners, if the city informed and encouraged participation in available services,

and if the city offered education or mentors.

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The review of literature identified the impact of education for small business owners and

an open-ended survey question was asked to determine whether entrepreneurs were interested

in participating in public workshops.

RQ6: What type of training workshops would entrepreneurs want to attend?

The participant could either skip the question or check any that applied.

Phase 3: Qualitative

The purpose of Phase 3 of the study was to confirm the model identified in Phase 2.

The development of the interview protocol for the third phase of the study was informed

by the literature review, Phase 1 interviews, Phase 2 Small Business Survey, and the

observation of the Virginia Beach Website. Questions were developed for the interview

questionnaire to address the themes and confirm the findings of Phase 2: training and

education, formal and informal networks, public resources for small businesses, government

efforts to support business startup and growth, elements for startup success, and mentors (see

Table 4).

Questions were designed to answer the final research question:

RQ7: What resources and assistance should public agencies offer that support

entrepreneurship?

Entrepreneurs were asked how the city could be more helpful for business startups and

were asked to rate the importance of specific items for the city to provide entrepreneurs, as

identified in the Virginia Beach survey. The participants were asked to recommend how the city

can improve the use of services offered, to identify services that are missing, and to make

suggestions for Virginia Beach to inform business owners of services available as well as how

to make Virginia Beach more “business friendly”.

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Table 4.

Phase 3: Protocol for Interviews with Entrepreneurs

Literature Website Observations

Phase 1 Interviews

Phase 2 VB Survey

Themes Interview Protocol Questions

Barclay, 2009 Chrisman, Holbrook, & Chua, 2002 Gomez, Isakov, & Hathaway, 2014 Semansky, 2015 O'Connor , 2013 Pauwels, Clarysse, Wright, & Van Hove, 2015 Sapinsley, Becker, & Kuyan, 2016 Shepherd, Douglas, & Shanley, 2000 Smith, 2010

XX XX XX Government supports business startup City services for startups City supports small business growth

How can the city be more helpful for business startups?

Acs, Desai, & Hessels, 2008 Baker & Baker, 2012 Birley, 1985 Brinkmann, 2008 Cassar, 2014 Chien-Chi, 201Chwolka & Raith, 2012 Delmar & Davidsson, 2000 Delmar & Shane, 2004 Edelman, Manolova, & Brush, 2008 Fernández-Guerrero, Revuelto- Taboada, & Simón-Moya, V 2012 Frankish, Roberts, Coad, Spears, & Storey, 2012 Gelderen, Thurik, & Bosma, 2005 Gordon, Hamilton, & Jack, 2012 Gruber, 2007 Henderson, 2002 Huggins, R. & Williams, N., 2011 Hires, 2010

XX XX

XX Elements for startup success Government supports business startup City services for startups Mentors Networks Training Incubators

How important are the items in the model?

4 1

Table 4. (Continued)

Literature Website Observations

Phase 1 Interviews

Phase 2 VB Survey

Themes Survey Questions

Kedia & Chhokar, 1986 Kessler, Korunka, Frank, & Lueger, 2012 Koellinger, Minniti, & Schade, 2007 Lerner & Mal mendier, 2013 Michaelides & Benus, 2010 Naia, Baptista, Januário, & Trigo, 2014 Pappano, 2012 Rauch, 2013 Robinson & Stubberud, 2014 Stuetzer, Obschonka, & Schmitt- Rodermund, 2013 Ulvenblad, Berggren, & Vivarelli, 2004 Winborg, 2013 Wiens, 2014

XX XX XX How important are the items in the model? (continued)

Birley, 1985 Chrisman & Katrishen, 1994 Chrisman, McMullan, & Hall, 2005 Curran & Blackburn, 200 Kedia & Chhokar, 1986 O'Connor , 2013

XX XX City supports small business growth

How can the city improve the use of these resources?

Hegarty, 2006 XX XX XX Do you have any recommendations for Virginia Beach to make the city more ‘business friendly’?

Methods of Data Collection

Phase 1: Qualitative

The first phase of the study included qualitative data, which views the subject through

the eyes of the participants (Creswell, 2007; Dowling & Cooney, 2012; Flood, 2010; Hays &

Singh, 2012; Lala & Kinsella, 2011; Starks & Trinidad, 2007) collected from the Virginia Beach

website and interviews with entrepreneurs. Concentrating on the perspective of the interviewee,

the phenomenology tradition is an appropriate approach because the focus of the study is to

describe the essence of the phenomenon (Creswell, 2007).

Collecting data for a phenomenological study uses a mix of approaches which can

include observations and interviews (Starks & Trinidad, 2007, pp. 1373, 1375) and according to

Dowling & Cooney (2012), “there is no single way to conduct a phenomenological study” (p. 21).

In addition to the interviews, the Virginia Beach website was observed to gather preliminary,

unobtrusive data for the study and semi-structured interviews were conducted to discover the

essence of the lived experience.

Observation – The Virginia Beach Website. The city website was observed because

it might be the first place entrepreneurs go to obtain startup information. New business owners

would likely visit the site to get information regarding procedures required by the city. According

to Hays and Singh (2012), written materials including public documents (such as websites) can

benefit research when they “provide source information critical to understanding a phenomenon”

(p. 284).

Interviews with Entrepreneurs. Data were collected during individual interviews using

an open ended protocol designed specifically for this study. The research was based on the

constructivist paradigm which is subjective in nature and creates meaning in a community

(Flood, 2010). Participants described their own stories in seeking, identifying and using the

local resources, offering individual interpretation and observations of their experiences.

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Personal interviews were conducted with ten entrepreneurs who had recently opened

businesses in the city and volunteered to participate. Questions in the Semi-structured

interviews asked about their lived experience (Koch, 1995; Starks & Trinidad, 2007) and the

effect of their perspective on that experience (Flood, 2010, p. 10). According to Lala & Kinsella

(2011), “First-hand accounts can reveal critical insights” to reveal issues of social concern” (p.

205).

While qualitative inquiry is not a common method found in business studies (Tucker,

Powell, & Meyer, 1995, p. 384), Starr (2014) argued that qualitative work can provide a valuable

instrument in adding stock to economic knowledge. Nelson (2005) performed open-ended

interviews with owners of small businesses to determine their secrets to successfully competing

with major retailers in their trading area; because every retailer had a different “story”, the

qualitative method was germane to the study.

Interviews were conducted in the participant’s business location or by phone; all were

recorded by the researcher and lasted about ten to fifteen minutes. Five of the subjects were

people known by the researcher. The researcher capitalized on opportunistic sampling (Hays &

Singh, 2012, p. 170) and invited three interviewees to participate after chance meetings with

owners. The last two interviewees resulted from snowballing, which is a “natural fit for

convenience sampling” (Hays & Singh, 2012, p. 169); the researcher was introduced to

additional individuals who were interested in the research. Participant numbers were used for

reporting findings.

Phase 2: Quantitative

The second phase of the study involved understanding entrepreneurs’ perception of

Virginia Beach as “small-business friendly” and the perceived barriers to small business growth.

The survey was posted on Survey Monkey. Potential participants were emailed a link to the

survey and asked to give consent to participate in the study. Also, the researcher created a QR

4 4

code that linked to the survey and members of the SBS emailed or texted the code to business

owners they came in contact with throughout the duration of the data collection period.

The completion of the survey took approximately 5-15 minutes, depending whether the

participant selected to answer one or both open-ended questions. No identifying data was

collected from the entrepreneurs and participation was anonymous.

Phase 3: Qualitative

Personal interviews were conducted with a new population: thirteen entrepreneurs who

had used public resources to start their businesses in the city and volunteered to participate.

Interviews were conducted in the participant’s business location or by phone; all were recorded

by the researcher and lasted an average of 55 minutes. This phase of the study also followed

the phenomenological theoretical approach in qualitative inquiry. Two of the subjects were

individuals known by the researcher, four participants were identified by Virginia Beach

Economic Development, four by 1MC, and two resulted from snowballing.

Analysis

Phase 1: Qualitative

In the first phase of the study, the strategy used for data collection and analysis followed

methods outlined by other researchers: steps developed by van Kaam, Anderson & Eppard

(1998), together with strategies outlined by Hycner (1985) and developed by Priest (2002); see

Table 5. Interviews were recorded and transcribed. The researcher listened to the recordings

and approached the transcriptions with openness to whatever patterns and themes emerged.

Bracketing was used to set aside prior knowledge and assumptions in order to address the

participants’ accounts with an open mind (Dowling & Cooney, 2012; Hycner, 1985; Priest, 2002;

Pringle, Hendry, & McLafferty, 2011; Starks & Trinidad, 2007; Tufford & Newman, 2012).

Participants’ names were coded by numbers (P1-1, for example) and remained anonymous.

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Phase 2: Quantitative

Descriptive statistics were used to report participant demographics: type of business,

number of years in business, number of employees, annual revenue, gender, race/ethnicity,

preferred language, and whether the entrepreneur owned a previous business or had another

location (identified in the literature as serial entrepreneurs). Descriptive statistics were used to

report the multiple choice questions.

Table 5.

The Phenomenological Analysis Process

Step Description

One Bracketing; suspend own meanings and interpretations; sensitize presuppositions and bias.

Two Transcribe interview verbatim; read transcript through several times, making notes and comments.

Three Identify and label emerging themes and meanings within the text; first hypothetical description of the experience.

Four Link themes to quotes in text by using constant comparison.

Five Create second textural description.

Six Repeat steps for each participant.

Seven Cluster the themes and identify related subthemes.

Eight Examine texts more closely for greater depth of meaning and interpretation.

Nine Develop a summary table of themes, and a detailed, interpretative, written account.

Note: Adapted from “Phenomenological Approaches: Challenges and Choices, ” by J. Pringle, C.

Hendry, and E. McLafferty, 2011, Nurse Researcher, 18, p. 15 and “An approach to the

Phenomenological Analysis of Data,” by H. Priest, 2002, Nurse Researcher, 10, pp. 58-59.

The open ended questions were reviewed and coded by the committee and sorted into

common themes. Volunteers from the SBS met once to identify the codes and sort responses.

The following month, the entire committee reviewed the grouped comments to modify, count,

and agree on the common themes previously identified.

4 6

Factor analysis was used to test the proposed construct model. Appropriate statistical

techniques to analyze data are determined by the research questions; factor analysis helps

researchers understand the factors (underlying structure) to develop or assess theory

(Tabachnick & Fidell, 2001, pp. 17, 25). The variables were examined using exploratory factor

analysis (EFA) to determine the correlations and cluster the underlying themes (Leedy &

Ormrod, 2013, p. 301) that explain most of the common variance, or communality (Klein, 2013,

p. 173) of the variables.

EFA is commonly used in survey instrument development (Fabrigar & Wegener, 2012,

pp. 20-23, 35) and construct identification (Thompson, 2004, p. 4) as a statistical method to

assist in determining which variables cluster together on the same scale. In EFA research, the

number of factors are not specified in advance (Klein, 2013, p. 174). This method is

recommended to help develop a model that can later be examined with confirmatory factor

analysis (CFA) in future studies (Fabrigar & Wegener, 2012).

A sample of reasonable size that is representative of the population tested is preferred in

EFA. With 351 participants, the sample size for this study is adequate. The cases-to-indicator

ratio for this study was > 20:1, which exceeds the common guideline of 10:1 and meets

research recommendations (Fabrigar & Wegener, 2012, pp. 26-27; Klein, 2013; Nunnally, 1974;

Thompson, 2004).

Phase 3: Qualitative

The phenomenological analysis process was repeated for the third, qualitative phase of

the study (see Table 5). Phenomenological research uses the analysis of significant

statements, the generation of meaning units, and the development of what Moustakas (1994)

called an essence description. Interviews were recorded and transcribed and field notes were

reviewed. The researcher made margin notes and formed initial codes after reading through the

transcribed interviews. To classify the data, the significant statements were grouped into

4 7

meaningful units (Creswell, 2007; Wolcott, 1994).

The researcher developed a qualitative codebook of predetermined codes to maximize

coherence (Creswell, 2014) and three researchers coded the data. The initial codes were

based on the first readings of each of the interviews and the common themes were determined

(Moustakas, 1994). For the iterative process, text was read in batches and segmented into

categories and relationships adapting the process outlined by Guest, Namey, & MacQueen

(2012). Each code included a code label and brief definition (pp. 52-55). The codes were used

to develop themes and shaped into a general description for this qualitative phase. In keeping

with the phenomenological research design, the codes were not counted by the researchers as

they were for the open ended questions in Phase 2; instead the researchers clustered the

constituents related to the thematic label to determine significance (Hays & Singh, 2012) and

reached 100% agreement on the essence of each theme (Creswell, 2007). Validity strategies

that were used included data triangulation, clarifying researcher bias, and peer debriefing. To

improve reliability, transcripts were checked for transcription mistakes and codes were cross-

checked for intercoder agreement (Guest et al., 2012). Participants’ names were coded by

numbers (P3-1, for example) and remained anonymous.

Summary

Chapter III described the methods and procedures used to conduct this study. Using

survey instruments developed for this study, data were collected. The sample for the first,

qualitative phase included 10 entrepreneurs with new businesses in Virginia Beach. Interviews

identified participants’ needs and use of small business resources. The sample for the second,

quantitative phase included a wide variety of small businesses in Virginia Beach. The survey

measured perception of city helpfulness and support of small business expansion as well as

participant awareness of public resources. Descriptive statistics and factor analysis was

described to analyze results. The sample for the third, qualitative phase included 12 business

4 8

owners who used available public startup resources. Interviews confirmed resources identified

in Phase 2 that assist small business owners for startup and growth. Qualitative analyses and

statistical procedures were outlined in Chapter III. The findings of the data collected will be

reported in Chapter IV.

4 9

CHAPTER IV

Findings

The mixed method design included three phases. The first, qualitative, phase of the

study explored entrepreneurs’ perceived needs and use of resources for business startup and

growth, and included unobtrusive data collected from the Virginia Beach website as well as data

from individual interviews. The second, quantitative phase included data collected from the

Virginia Beach Small Business Survey. The third, qualitative phase included data from

interviews with different entrepreneurs who used public resources for business startup.

Phase 1: Website Observation and Interviews

Observation of the Virginia Beach website revealed some useful information (see Figure

3). The tone of the writing on the web page indicated a helpful attitude. There was a great deal

of information available but some good resources were hard to find because observers must

scroll down a page filled with print. The problem was the confusing layout. There were only two

main headings on the website page, Economic Development and Public Libraries. Economic

Development should be retitled “SWaM” (Small Woman and Minority), because the two short

paragraphs of text deal with this topic, not general economic development, leaving out any

entrepreneurs who are not women or minorities. An additional problem was that the highlighted

iBook link led to a dead page. Training was accessible as well, but was poorly labeled. All of

the subheadings looked very similar to one another; nothing really stood out. A few great points

were not highlighted to draw your attention and some valuable links to websites like SCORE

could easily be missed by an entrepreneur.

“Public Libraries” was the second major topic observed and though there was a list for

the of types of resources available, someone who wants to start a business in Virginia Beach

would first have to have a local library card to access the material. To obtain a card, one must

visit a physical location; this leaves out anyone who does not live in the city and therefore does

5 0

not serve people from outside the area who might want to open a business in Virginia Beach.

The “Public Library” section was also coded as a confusing heading.

Figure 3. Themes from the city Business Resource page.

A number of links took one to a blank page and “Steps to Establish a Small Business in

Virginia” was listed in two places. Other links lead you to another site that required a password

or subscription: “Business Plans Handbook”, “Encyclopedia of Small Business”, and ‘'The Wall

Street Journal’s Small Business”.

This finding is significant because it aligns with data discovered after examining the

transcripts from the business owner interviews. Only one owner interviewed (P1-2) visited the

Virginia Beach website, but he did not find it useful: “I did go to the website, I can't remember it

being helpful” and “But I still don’t go to the Virginia Beach small business website, or can't find

anything, nothing declarative that says ‘these are your steps, this is what you need to do’”. If

nascent entrepreneurs are seeking information for steps to take to get a local business started,

they will not find clear directions on the city website that specify either which city office to visit

first, or the information that the city will request from them.

5 1

Table 6.

Summary of Themes from Phase 1 Interviews

Thematic Cluster Origin

Thematic Clusters Codes

Research Questions Sources of information used

Online Other research- visited competitors Clients, Business Associates Distributors/manufacturers Other Business Owners SBDC SCORE

Resources entrepreneurs wish they had

Mentor List for opening a business More information on Demographics, etc.

Participant Recommendations

Policy to help small businesses

Tax incentives Business Incubators Advice on how to get started

Simpler process is needed Simplify / Streamline Give clear directions (Permits) Provide start-up list or packet Make information available online

New Themes The city is not helpful

Runaround Wasting time Poor communication between departments Focuses only on large businesses

City employees have a bad attitude

Never happy Make it difficult Don’t care

Questions and Themes from Interviews. A code book was used for documentation

and field notes were reviewed. To develop codes, the recordings were listened to several times

to get accurate transcriptions and to get a sense of the whole interpretation; then units of

relevant meaning were clustered (Hycner, 1985, pp. 282-284). The process was repeated for

each participant, (Priest, 2002, p. 59) using constant comparison to collapse codes after all the

data were analyzed (Hays & Singh, 2012, pp. 49, 302-303). As the data were analyzed, new

themes emerged (see Table 6). The entrepreneurs interviewed discussed their experiences

5 2

opening their businesses in Virginia Beach and new themes emerged that were not related

directly to the research questions. Results revealed that the participants had similar

experiences and issues with the city.

Sources of Information. The first question in the interview asked whether

entrepreneurs sought information before opening their businesses. Asked to think back to the

time they first opened, all participants sought information from outside sources; P1-1 and P1-5

found information online and P1-6 said “I visited other stores”.

Six of the respondents used their spheres of influence and got information from their clients,

distributors, or friends in business, and two went to the SBDC.

“We have a lot of clients that are in various businesses. I have a client who does

marketing, so I mean, I will talk to her. I have a client who is in banking, so you use the

sources that are available.” (P1-5)

One owner indicated that he is dubious of getting advice from a generic source:

“And this is going to, it may sound arrogant, but usually when you go outside to look for

information to help you learn your business, it's people who have never worked your

business. They can't tell you anything about it, they went and got an MBA or whatever,

their doctorate in business administration and they are telling you this is how you should

run your business and I’m like, I don't see it. I'd rather go talk to someone like =Bill=

who’s owned =2 local restaurants=, 15 years, 20 years and say, “hey, =Bill=, what are

you doing; =Bill= what are you seeing, what's the trend?” (P1-2)

Six interviewees who had been in business for several years had all opened new

locations recently, yet none of the respondents thought about the Virginia Beach website as a

source for information that would help them open their businesses. P1-9 visited the website but

found the information on the Norfolk site more helpful:

5 3

“Norfolk has a little better website, um; they actually have a ‘simplify the process’ that

you can use.” (P1-9)

Findings indicated an opportunity for Virginia Beach to help entrepreneurs by improving their

website.

Entrepreneurs are finding sources of information available, even those who opened

businesses before websites existed. P1-7 got information from his banker about the SBDC,

which provided some very helpful material: “I got a full study on how to run a [business].”

While P1-7 and P1-4 took advantage of the local SBDC, the other interviewees relied on

a network of business associates, friends, and clients to get the information that they needed.

None of the ten entrepreneurs considered looking to the city for information.

“I've never thought to go to the Virginia Beach website for information on how to help

run my business.” (P1-7)

Information Entrepreneurs Wish They Had. A key question in the interview attempted

to determine information that entrepreneurs would like to see the city offer. Three participants

offered specific advice:

“I think a mentor would have been great. I think if I had somebody who have help me

not have made as many mistakes before I first opened my first business, I think it would

have probably helped me be more successful after [someone who] understands labor,

and product and costs; you know, tax incentives, and maybe some connections with

lawyers and meeting with bankers, and helping with loans.” (P1-7)

“I probably would've looked, should have looked more into the demographics of this

area as far as what the income was and that kind of thing.” (P1-1)

“I would say that the best way the city could have helped me, is if there had been a piece

of paper like this one right here that says “okay, if you are opening a restaurant, these

are the things you've gotta have”. (P1-3)

5 4

Seven participants suggested that the city provide a list of steps to make the process smoother;

P1-7 was given a list when he opened a location in Chesapeake:

“I wish there would have been a better check list for Virginia Beach” (P1-9)

“If they put together and said, “okay. You are opening a restaurant. This is what you

need to open a restaurant. If you are opening a hair salon, this is what you need to open

a hair salon.” (P1-5)

These findings further confirm the need for clear directions from the city which could be posted

on the website.

Participant Recommendations

Policy to Help Small Businesses. Several entrepreneurs offered ideas for proactive

steps that the city could take to assist small businesses, suggesting incentives that could help

the smaller companies compete:

“There is enough incentives out there for the major companies. When you take a look at

small businesses, small businesses the driving force for the economy.” (P1-8)

P10 believes that there are talented individuals with experience in their fields who just

need some assistance to get started in business, saying “What is the city doing to promote

people to step out there and get their own thing started?” P1-9 suggested setting up business

incubators “like the city of Norfolk. I love to see it for Virginia Beach as well. Give some of these

young ideas chance.” and P1-8 believes the city could offer tax incentives to small businesses,

not just the large ones.

“Your major businesses have tax incentives. Should there be a tax incentive for a small

retailer? That might be a good idea so you can give them the first year.” (P1-8)

Simplify the Process. Simplifying or streamlining the process was the strongest theme

that emerged in these interviews. According to the participants, when an entrepreneur goes to

the city office, there are no clear directions for the process.

5 5

“If there was a whole way to streamline the process. Streamline is probably the word

that I would fire out over and over again.” (P1-3)

“They need to work on the district as far as streamlining the operations” (P1-7)

“I think they need to simplify how the people get into business. It takes way too long.”

(P1-2)

“ [it would have been simpler] had they said to me, okay: step one, go get a health

permit. Step two, bring me business plans.” (P1-5)

“But another example is, we changed addresses. So in order to change your address on

your business license, you have to, go down to the-why can’t I fill out a form on just

doing the same business I've always done, but I have to go down to the city and fill out

more forms on changing my address for my business. …How about, let me go online,

and fill out a form that says “here's my new address” and be done.” (P1-5)

“I guess what I would do, when you go in there and buy a business license; they could

give you a packet. Here are the numbers to call if…” (P1-6)

“If this information was available to someone ahead of time, they probably could save a

lot of time and money by doing this before they go and select a location.” (P1-10)

P1-2 blames it on leadership: “There is no clear leadership there trying to simplify the system

for the citizens. None whatsoever.” P1-7 offers a suggestion borrowed from an experience with

the city of Norfolk:

“[Norfolk] assign[s] somebody to you. When you tell them that you were going to open a

business, they assign someone to you that carries you through all of the processes. The

whole process. I spoke with =business owner=, and he can't say enough about the city

of Norfolk, how they helped him so much. They gave him a mentor. They gave him

someone to help him with economic development, as far as, you know, the enterprise

zones, tax incentives, you know, all that stuff. It's pretty crazy.”

5 6

Another entrepreneur had experiences with both Norfolk and Virginia Beach and echoed P1-7’s

sentiments:

“When I went to Norfolk, I had someone from economic development, they pushed us

through zoning, they got us all the resources that we need like, and I don't know if that's

how they do it all the time but it was an unbelievable experience, we went through it

flawlessly with her and I will say that with Virginia Beach and opening, I was out there on

my own, wandering around.” (P1-4)

The need for a simpler, more defined process was brought up by several interviewees.

Apparently, the city does not outline clear steps to follow for opening a business.

“Nobody told us up front what we needed to do.” (P1-5)

Chesapeake made the process simple by giving P7an outline for what they needed to get their

operation running, P1-9 and P1-7 made similar suggestions.

“They actually, when we dropped off our plans, they said that we are going to give you a

list before you come back. And they actually e-mailed us a list so that we would be more

prepared when we would go back to the city.” (P1-7)

Their thoughts can be summed up by P1-2’s last comment in his interview:

“Simplify the process. Simplify the process.”

New Themes. In addition to the information related to the research questions,

entrepreneurs comments produced new themes for the study (see Figure 4).

The City is Not Helpful. Two entrepreneurs made comments on the lack of help they

found when going to city offices to get information or to turn in required documents. Neither

man felt that city employees felt obligated to help business owners; instead, it is quite the

opposite:

“Absolutely no help. You’re on your own. You've got to figure it out.” (P1-2)

5 7

“You are completely on your own… Not only are you on your own, but you are made to

feel like you are bothering them.” (P1-7)

Figure 4. Words used to describe experiences opening a business in Virginia Beach.

Four participants felt that there is a level of disorganization together with a disinterest in helping

business owners succeed in opening their companies. P1-2 said that you need to get names of

individuals that you deal with ““in case you have to go back. Which, happens often.”

“It was crazy that we had to go get a building permit to build out this, but in order to get

a building permit you have to have the health permit, so there was a lot of going back

and forth between the departments of the city to get where we needed to be, to get the

permits we needed to work. That I thought was a little bit crazy.” (P1-5)

“There are literally times when I went down they and some people would know what they

were doing and some people wouldn't… You have to be calm and you have to be

assertive, in order for them to find somebody that can answer your questions. You know

it's such a, there's so much red tape that, um, it's difficult to digest, it's not a process. ”

(P1-2)

5 8

Several participants described some form of “runaround”:

“We just needed a construction permit. They sent us to three different buildings. We

went to the location that they originally told us, my wife and I, they said “No, you have to

go to this location”, and by that time I was hungry for lunch.” (P1-8)

“Opening up in Virginia Beach was trial and error…there's a lot of running.” (P1-2)

“Now when you got there, it was ‘well you don't have this. So you need to go get this

and come back.’ So it's a lot of going back and forth getting what you needed.” (P1-5)

“Here's a perfect example. We had to have a diagram of the tables. So we went like four

different times down to the courthouse to get information and they kept taking us back

get information, and to do different things.” (P1-3)

“It’s a standing joke that we have, no matter how prepared you are, they always send

you home to get something else.” (P1-7)

P2 went into great detail on several of the problems he had with people in different city

offices. On getting a fire inspection, two departments gave him conflicting requirements. Poor

communication with city employees caused delays that affected revenue for P1-2: “So again, it

was another two days waiting before we could get the plumbing inspection.” With “no

communication between bureaucracies”, he had the “runaround” from City and State ABC

officials: “And there’s no process.”…” “Why can’t the city of Virginia Beach, when they know it’s

a restaurant, why can’t they email it out to people that need it. It should be an automatic thing.

Here it goes, bang.”

“If somebody would have said, “when you come to apply for building permit, you need to

-have a health Department, you know, approval for the site. You need to have, you

know, everything you needed to have, when you came and said to them, “I need a

building permit for XYZ". It didn't happen that way.” (P1-5)

“And then, once you go to planning, planning doesn't always agree with zoning.” (P1-2)

5 9

These problems cause numerous delays, and four men commented on the value of their time,

or as P1-7 said, “just an employee that cared enough to know that “time is money”. Others had

similar comments:

“So I wasted, countless hours, since I called the lady in the office saying, “You don't

need a fire inspection to open.” You know, she thought it was odd that I was calling for a

fire inspection. I said, “That would be great to know, let your front desk person know.

Because I wouldn't have not wasted your time, because I came out here twice. ” (P1-2)

“Everything is drawn out the last-minute. We try to start things way early. We started

months early, trying to get paperwork and we are still waiting on, you know, you have to

have your fire inspection-going back to that piece of paper again” (P1-3)

“We had to have someone on site and come out and visually look at the place to see

that it is the same that is depicted by the city of Virginia Beach… And then when they

came by, the just stepped up to the front door and didn't actually look at the venue, they

just stepped up to the front door and said, ‘hi, I'm just here to collect, you know the

document’. It was just time and resources [wasted]”. (P1-10)

Three participants suggested better communication between the different city offices:

“There's not real good communication or resource communication between like let's say

the Commissioner of revenue's office and the treasurers department…There's no,

there's no small business step process that you go to and say, okay, if you are opening a

restaurant, this is your first action. And this is the information that we are looking for

when you go there. Nothing like that.” (P1-2)

“I felt like there was lack of communication between departments. So, I guess, [it would

be helpful] if they communicated.” (P1-5)

While the experienced business owners complained about the problems with the city offices,

P1-1, a nascent entrepreneur who opened a gift shop last spring, did not experience any of

6 0

these issues; she went to the city for her business license and did not have any trouble, saying:

“I had a very helpful person down there, I can't remember his name, but yeah, he was very

helpful.”

Not there to serve: Bad Attitude. Coupled with the lack of organization and

communication, two participants cited examples of working with city employees with bad

attitudes, making the process even harder.

“The big problem with the city is, you know, they forget that they work for us… You go

down there, they always have an attitude, they're never happy. They, um, were trying to

make it difficult on you, opening up your business.” (P1-7)

“Some people are just a cog in the machine. You know, the sad part about it is, it gives

you a real, can give a real sour taste in your mouth about government employees…

Because it is literally, “this is my job, I have to move from it, you can't get anything done

unless I approve it’” (P1-2)

Entrepreneurs have choices where they will open up their businesses; the city should

look at business owners as customers who create revenue for the community. Apparently,

other area cities view business owners differently and have a more welcoming attitude. The

entrepreneurs pointed out how the bad attitudes and lack of concern result in lost opportunity

besides loss of revenue.

“They need to appreciate business and I think that the city of Norfolk appreciates that

you're trying to open up a business in the city and I think that that truly is the big

difference.” (P1-7)

“In other words, they don’t see us as customers.” And “They don’t go, “this is great

because it will bring us more tax dollars, bring us more revenue, employ more people.

They don't see it that way. They don't care.” (P1-2)

6 1

In addition, restaurant owners also collect meal tax for the city. P1-2 feels that restaurants

should be held in high regard and feels underappreciated: “Yeah, we'd probably collect $12,000

a month, $15,000 a month for them in the city of Virginia Beach”. He imagines someone

challenging the system:

“What if the guy wanted to open up the restaurant and he said, ‘Look, I don't want to be

your tax collector. I want to open a restaurant and I want to charge them just for their

meals. And I'll let them worry about having to pay their 6 1/2% tax to the city. Go collect

it from them.’ But they can't do that.”

He recognized that this is a time and resource consuming hassle: “But there's no benefit for us

doing it. No benefit. So I have to use my resources, my manpower”.

The suggestions made by these entrepreneurs are not unreasonable. Virginia Beach

could improve their process by providing clear directions for the steps to open a business and

also work on the attitude of employees by treating business owners like customers.

“You know, obviously, we have to work, so you're going to do what you have to do, but,

it's a hassle. It's a hassle.” (P1-5)

The results from the interviews were used to develop the survey instrument for the

Virginia Beach Small Business Survey, Phase 2 of the study (see Figure 5).

6 2

Figure 5. Initial business startup Phase 1 model: interviews.

Sources of information used

Online research, visited competitors

Sphere of influence

Friends

Clients

Business associatesSBDC, SCORE

Resources entrepreneurs wish

they had

Mentor

List of steps to open a business

More city information

Recommendations for the City

Policy to help small businesses

Tax incentives

Business incubators

Advice on how to get started

Simpler process is needed

Simplify / Streamline

Give clear directions/ start- up list

Make information available online

Should focus on small business

Runaround-Wasting time

Poor communication between departments

Focuses only on large businesses

Helpful employees Make it difficult, don’t care

Resources for Business Startup and Growth

Protocol

Questions

6 3

Phase 2: Virginia Beach Small Business Survey

Of the 351 owners who participated in the Virginia Beach (VB) Small Business Survey;

35% were women and 65% were men. Over a third (35%) had owned a previous business or

had opened another location. The races varied and closely mirrored the ethnicity of the city

(see Table 7). English was the preferred language of 99% of participants. As shown in Table 8,

the sample represented owners from different industries: Construction Trades, Professional

Table 7.

Race/Ethnicity of Participants and the City of Virginia Beach

Race/ethnicity Response Percent

Response Count

VB Residents

American Indian or Alaskan Native 1.7% 6 .4%

Asians / Pacific Islander 3.2% 11 6.6%

Black or African American 18.0% 62 19.3%

Hispanic American 8.1% 28 7.7%

White / Caucasian 69.0% 238 68.9%

N = 345

Table 8.

Type of Business

Business Type Response Percent Response Count

Construction Trades 18.1% 62

Professional Services 49.7% 170

Retail 12.3% 42

Manufacturing 4.1% 14

Food Service 5.3% 18

Personal Service 7.6% 26

Healthcare / Biotechnology 2.9% 10

N = 342

6 4

Services, Retail, Manufacturing, Food Service, Personal Service, and Healthcare /

Biotechnology. The majority of participants (49.7%) represented professional service

businesses. Various size businesses were represented in the survey sample. Annual revenue

ranged from less than $100, 000 to more than 5 million dollars (see Table 9) and numbers of

employees varied from zero to more than 50 (see Table 10). Over half of the businesses

(56.1%) would be considered microbusinesses with 1-5 employees. New and established

Table 9.

Estimated Annual Revenue

Table 10. Number of Employees (Including Respondent)

Annual Revenue

Response Percent

Response Count

Less than $100,000 103 29.9%

$100,000 – $250,000 54 15.7%

$250,000 – $500,000 35 10.2%

$500,000 – $1,000,000 45 13.1%

$1,000,000 – $5,000,000 70 20.3%

More than $5,000,000 37 10.8%

N = 344

Number of Employees Response Percent Response Count

1 80 22.9%

2-5 116 33.2%

6-10 44 12.6%

11-20 41 11.7%

21-49 41 11.7%

More than 50 27 7.7%

N =349

6 5

businesses were represented in the sample, as shown in Table 11. Sixteen percent have been

in operation for less than 2 years and would be considered new businesses. Length of time in

business ranged from 1-2 years for 56 companies, 2-5 years (47 organizations), 5-10 years (68

firms), and eleven firms have been in business for more than 10 years. Before opening their

businesses, 336 individuals (95.7%) contacted one or more of these for guidance: a banker,

lawyer, and/or an accountant; the city of Virginia Beach; a mentor, industry associations, or

business associates and/or friends (see Figure 6).

Table 11. Number of Years in Business

Years in Business Response Percent Response Count

Less than one year 8.0% 28

1-2 years 8.0% 28

>2-5 years 13.4% 47

>5-10 years 19.4% 68

More than 10 years 51.1% 179

N = 350

Figure 6. Individuals that participants contacted for guidance before opening their business(s).

39.6%

15.8%

38.7%

18.2%

59.5%

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6 6

Statistical Analysis. Seventeen questions followed a Likert format using a five point

scale as follows: 5 = strongly agree, 4 = somewhat agree, 3 = neutral, 2 = somewhat disagree,

1 = strongly disagree (see Table 12). Four questions on the survey asked for entrepreneurs to

identify their biggest challenge to overcome when opening a new business. Getting funding

ranked the highest as the greatest challenge (M = 3.40, SD = 1.39), followed by finding

information regarding government requirements or city regulations (M = 3.19, SD = 1.35),

finding qualified employees (M = 2.91, SD 1.26) and finding a cost effective location (M = 2.84,

SD = 1.31).

Helpful For Business Startup. Four survey questions addressed entrepreneurs’

perception of Virginia Beach as helpful to small business owners. The first question asked

whether city employees were helpful and receptive to working with small businesses. While 101

(29.1%) individuals remained neutral on this topic, 116 owners (33.4%) answered strongly

disagree or disagree and 130 owners (37.5%) either agreed or strongly agreed (M = 3.02, SD =

1.17). The second question asked participants to rate whether VB outlines clear steps for a

streamlined process in opening a business in the city (M = 2.81, SD = 1.13) and while 128

(37.2%) were neutral, fewer participants (88 or 25.7%) agreed that steps were clear than (127

or 37%) disagreed. The third question addressing RQ3 asked if the business owners were able

to locate needed information on the VB website. While 131 (38.08%) participants were neutral,

137 (39.83%) somewhat or strongly disagreed and 78 (22.09%) agreed or strongly agreed (M =

2.72, SD = 1.05). the last question in this group asked participants if they looked at other cities

in the Hampton Roads area before opening their business and found that Virginia Beach offered

more help in the process. Comparing Virginia Beach to other area cities, 138 owners disagreed

with the statement (40%), 169 participants (49%) were neutral and 38 owners (11%) indicated

that Virginia Beach was more helpful in the startup process (M = 2.49, SD = 1.05).

6 7

Table 12. Descriptive Statistic Results From Survey Questions: Mean, Median, and Standard Deviation

RQ Survey Question N Median M SD

3 City employees: helpful to work with small businesses 347 3.00 3.02 1.17

3 VB outlines clear steps for a streamlined process in opening a business in the city

343 3.00 2.81 1.13

3 Able to locate needed information on the VB website 344 3.00 2.72 1.05

3 I looked at other cities in Hampton Roads for my business /found VB offered more help in the process

345 3.00 2.49 1.05

4 City departments /inspectors are more interested in assisting to achieve compliance than penalizing

342 3.00 2.83 1.05

4 The city encourages business expansion by offering incentives.

341 3.00 2.42 1.11

4 The City gives a preference for larger businesses over small businesses.

338 4.00 3.77 1.22

4 Economic development is aware of the impact when offering incentives for competing larger businesses

340 3.00 2.71 1.20

4 City administered taxes has inhibited the growth of my business

344 3.00 3.21 1.12

5 Aware of city services to assist business owners 346 2.00 2.42 1.22

5 VB informs/encourages businesses to use available private sector resources to assist businesses

345 2.00 2.44 1.15

5 VB encourages business expansion by offering education or mentors

342 3.00 2.52 1.07

Note. A five point Likert scale was used: 5 = strongly agree, 4 = somewhat agree, 3 = neutral, 2

= somewhat disagree, 1 = strongly disagree.

Supportive For Small Business Expansion. Five survey questions addressed

entrepreneurs’ perception that Virginia Beach is supportive for small business expansion. The

first question in this group asked if city departments and inspectors are more interested in

assisting to achieve compliance than penalizing businesses (M = 2.83, SD = 1.05). More

6 8

owners believed that inspectors were more interested in penalizing businesses (109 or 31.9%)

than achieving compliance (79 or 23.1%); 154 owners were neutral (45.03%).

The second question queried if the respondent felt that the city encourages business

expansion by offering incentives. More than one third (37%) of the respondents were neutral on

the subject of the city offering incentives, 137 participants (49%) disagreed or strongly

disagreed with the statement (M = 2.42, SD = 1.11). Forty nine owners agreed or strongly

agreed that Virginia Beach offers incentives to encourage business expansion (14.4%). The

third question asked if the city gives a preference for larger businesses over small businesses.

The majority of respondents, 205 owners (60.7%), either strongly agreed or agreed that the city

gives preferences for larger businesses over small businesses and 50 people (14.8%)

disagreed; 83 individuals (24.6%) were neutral (M = 3.77, SD = 1.22).

The fourth question in this group asked if the Department of Economic Development was

aware of the impact on existing small business when they offer incentives for competing larger

businesses. While 76 owners answered that they believe that the Department of Economic

Development is aware of the impact on existing small business when they offer incentives for

competing larger businesses (22.4%), 136 owners, or 40% remained neutral and 128 owners

(37.7%) feel that the Department is not aware of the negative impact (M = 2.71, SD = 1.20).

The final question addressing this research question asked if the level of city

administered taxes has inhibited the growth of respondents’ businesses. More individuals

agreed that their growth has been hindered by city taxes (36.7%) than those who feel that it has

not (28.6%); 37% were neutral on taxes hindering growth (M = 3.21, SD = 1.12).

Training Services Offered by the City. Three survey questions explored

entrepreneurs’ awareness of services offered by the city. The first question asked whether the

participant was aware of services that the city offers to assist business owners to open a

business. Only 75 respondents (21.7%) agreed that they were aware of city services to assist

6 9

business owners; 194 (56.1%) responded that they are unaware of city services and 77 (22%)

were neutral on the subject (M = 2.42, SD = 1.22).

The second question asked if the city does a good job informing and encouraging

businesses to use all of the private sector resources available for assistance in opening and

operating a business. The majority of business owners (178 individuals, 51.6%) either

disagreed or strongly disagreed that the city does a good job informing and encouraging

businesses to use all of the private sector resources available for assisting businesses (M =

2.44, SD = 1.15). 112 owners (32.5%) remained neutral and 55 (15.9%) believed that the city

informs and encourages businesses to use these resources. The third question asked whether

the participant felt that the city encourages business expansion by offering education or

mentors. Only 47 business owners (13.8%) agreed that the city encourages business

expansion by offering education or mentors; 145 owners (42.4%) were neutral and 150 (43.9%)

felt that the city does not encourage business expansion by offering education or mentors (M =

2.52, SD = 1.07).

Interest in Workshops. The final survey question addressed the sixth research

question, asking owners what type of training workshops they would want to attend. Twelve

workshops were identified for the respondents to select from and participants could check all

that they have interest in. The list of workshops was developed based on classes that are

offered in Austin, Texas, a city identified as one of the most small-business friendly (Allen &

Daniels, 2013; Clifton & Badal, 2014; Ortmans, 2016) and fastest-growing (Carlyle, 2015) in the

United States.

Choices for workshops on the survey included: Small Business Accounting, Strategic

Planning, Pricing Strategies, Internet Marketing/SEO, Setting Goals, Getting Investors for your

Business, Developing a Marketing Plan, Customer Service and Keeping Customers, Using

Social Media, Understanding Business Taxes, Secrets of Small Business Success,

7 0

Understanding Cash Flow (see Figure 7). Two hundred fifty eight participants (73.5%) indicated

interest in one or more workshops with an interest in attending an average of 3.68 workshops.

Small Business Accounting

Strategic Planning

Pricing Strategies

Internet MKTG/SEO

100

Setting Goals

Getting Investors for your Business

Developing a Marketing Plan

Customer Service

Using Social Media

Understanding Business Taxes

108

Secrets of Small Business Success

126

Understanding Cash Flow

Figure 7. Number of individuals interested in each workshop and percentage of interest in each

workshop

7 1

Secrets of Small Business Success and Understanding Business Taxes were the most

popular valued by 48.8% and 41.9% individuals. At least one third of the respondents were

interested in Internet Marketing/SEO, Using Social Media, Strategic Planning, and Getting

Investors for Your Business. More than one-fourth of the entrepreneurs were interested in

learning about Small Business Accounting, Pricing Strategies and Developing a Marketing Plan.

Both Setting Goals and Customer Service – Keeping Customers ranked the lowest and had

about 16% interest.

Factor Analysis. Business owners were asked to rate 12 Likert scale items (that were

associated with research questions 3, 4, and 5) on the instrument used for this study. The data

were loaded in SPSS to perform a factor analysis to detect the underlying structure and see

whether the items loaded into three factors.

Data Screening and Benchmarks. Criteria that are well recognized for the factorability

of a correlation were used. Only items that loaded ≥ .4 and had an eigenvalue of >1 were

included in the analysis (Field, 2009; Karami, 2015; Sanders, Gugiu, & Enciso, 2015; Zhang &

Preacher, 2015). All items loaded higher than .4 and were retained.

First, the distributions were analyzed to determine whether any variables should be

removed due to limited range or skewness and all items were retained. Using listwise deletion,

338 – 347 cases were analyzed, satisfying the minimum amount of cases for factor analysis.

Principle Component Analysis (PCA) was conducted on the 12 items with orthogonal rotation

(verimax). The Kaiser-Meyer-Olkin measure of sampling adequacy was .88, which indicated

great a level of correlation between items and meets the >.6 standard of acceptance (Field,

2009; Hutcheson & Sofroniou, 1999; Tabachnick & Fidell, 2001). Bartlett’s test of sphericity was

highly significant 𝜒2 (66) = 1491.15, p < .001 and indicated that correlations between items were

sufficiently large for PCA. Analysis of the correlation matrix indicated no need for excluding

7 2

Table 13.

Factor Analysis Pearson Correlations

1 2 3 4 5 6 7 8 9 10 11 12

1 EmpHelpful 1

2 ClearSteps 0.49 1

3 VBWebsite 0.39 0.74 1

4 AwareServices 0.32 0.53 0.52 1

5 InformEncourage 0.38 0.54 0.60 0.67 1

6 OtherCities 0.18 0.27 0.31 0.26 0.37 1

7 Inspectors 0.46 0.48 0.41 0.36 0.44 0.27 1

8 Incentives 0.44 0.50 0.49 0.47 0.58 0.34 0.46 1

9 ImpactLgBus 0.26 0.32 0.30 0.27 0.31 0.14 0.33 0.29 1

10 EducMentor 0.32 0.41 0.38 0.50 0.60 0.29 0.33 0.57 0.41 1

11 CityTaxes 0.14 0.10 0.09 0.06 0.07 0.03 0.13 0.24 -0.04 0.10 1

12 PrefLarger 0.13 0.21* 0.27* 0.30** 0.32** 0.18** 0.17 0.36 0.09** 0.33* 0.14 1

N=349 boldface = p ≤ 0.001 ** = p ≤ 0.01 * = p ≤ 0.05

items due to singularity; almost all of the items indicated significant values of < .01 and Pearson

correlations < .9 (Field, 2009). Significant correlations between variables are shown in Table 13.

Factors and Reliability. Themes for the variables were identified through exploratory

factor analysis using verimax orthogonal rotation to enhance retained factors’ interpretability

(Karami, 2015). This method of rotation was selected to maximize the distribution within factors

to discover interpretable clusters (Field, 2009). Factors with eigenvalues > 1 were retained.

Table 14

Eigenvalues and Percentages of Explained Variances for Analysis of Survey Questions

Item

Initial Eigenvalues Extraction Sums of Squared Loadings

Total % of Variance

Cumulative %

Total % of Variance

Cumulative

1 6.29 40.93 40.93 6.29 40.93 40.93

2 1.53 9.99 50.92 1.53 9.99 50.92

3 1.36 8.88 59.79 1.36 8.88 59.79

4 1.15 7.50 67.29

5 0.95 6.17 73.46

6 0.94 6.10 79.57

7 0.80 5.22 84.78

8 0.63 4.13 88.91

9 0.59 3.86 92.77

10 0.44 2.86 95.63

11 0.41 2.66 98.29

12 0.26 1.71 100.00

Because the scree plot was somewhat ambiguous, the interpretation was not the sole

determinant for retaining factors (Field, 2009; Klein, 2013). Three components were retained

based on the large sample size and Kaiser’s criterion of eigenvalues >1. In combination, the

three factors explained 59.79% of the variance (see Table 14). Verimax rotation with Kaiser

7 4

Normalization converged 7 iterations to further define the underlying structures. Eleven of the

twelve item loaded greater than .6 (see Table 16) and over half of the variables in each factor

can be considered “good” to “superb” (Hutcheson & Sofroniou, 1999). The factor solutions can

be considered reliable using Guadagnoli & Velicer’s (1988) criteria: two of the factors had more

than four loadings greater than .6; the third factor may possibly be considered with few loadings

Table 15. Factor Loadings and Communalities for 12 Items from the Virginia Beach Small Business

Survey.

Items

Factor 1 Helpful for Business Startup

Factor 2 Encourages

Business Expansion

Factor 3

City Taxes

Communalities

Employee Helpful .91 .64

Clear Steps .80 .65

Inspectors .70 .51

VB Website .61 .51 .58

Large Bus. Impact .61 -.57 .52

Preference for Larger .96 .72

Inform Encourage .52 .80 .71

Aware Services .83 .63

Education – Mentor .68 .55

Incentives .58 .64 .63

Compare Other Cities .45 .23

City Taxes Inhibit Growth .93 .73

Eigenvalue 3.83 3.90 1.46

Proportion of Variance Explained 24.93 25.39 9.47

Cumulative Variance Explained 24.93 50.32 59.79

Factor Mean 14.05 14.41 3.2

Chronbach’s alpha .81 .78 —

Valid N 232 328 344

Note: based on a Principle Components Analysis (PCA). Rotation Method: Orthogonal Verimax with

Kaiser Normalization. Only loadings with absolute values >.4 are shown. Higher absolute values are in

boldface.

7 5

as the sample size was greater than 300 (pp. 271, 274). As shown in table 15, both helpful for

business startup and encourages business expansion had high reliabilities, Cronbach’s α = .78

and .81 respectively.

The following three components were identified:

Factor 1 suggested a relationship with “helpful for business startup”. This factor

contributed to 40.93% of the variance and 25.16% of the rotated variance. The five items that

loaded on the variable included: helpful city employees, Virginia Beach outlines clear steps,

helpful inspectors, VB website information, and large business impact. This factor was found to

be highly reliable, α = .78.

Factor 2 suggested a relationship with “encourages business expansion”. This factor

contributed to 9.99% of the variance and 24.71% of the rotated variance. The six items that

loaded on the variable included: VB prefers larger businesses, VB informs/encourages the use

of public resources, personal awareness of public resources, VB provides education or mentors,

VB provides incentives, and VB compared to other cities. This factor was also found to be highly

reliable, α = .81.

Factor 3 suggested a single item, “City taxes inhibit growth”. This factor contributed to

8.89% of the variance and 9.18% of the rotated variance. Only one item loaded on the variable:

City Taxes prohibit growth. Reliability analysis was not performed on this variable since only

one factor loaded here. For future studies, this component could either be eliminated or

enhanced with additional questions to address the construct.

Open Ended Questions. Two questions on the survey allowed respondents to offer

their views. The common themes are reported on Table 16. Many of the participants who

answered the first open ended question continued their thoughts on the second question;

therefore, the results for these two questions is reported in aggregate, as illustrated in Figure 8.

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Table 16.

Recurring Themes from Open-Ended Questions.

Theme

Suggestions to make VB more business friendly

Number of Responses

Other information for the SBS

Number of Responses

Taxes – Fees 22 13

Information 19 10

Double standard –Discrimination-Favoritism 18 —

Process 15 3

Attitude – Competence 14 9

Training and Services 12 8

Large vs Small Businesses 9 18

Incubator – Networking 9 5

Internal Communication – Runaround 8 3

Norfolk 5 1

Policy 5 —

Chesapeake 4 —

Website 4 —

Zoning 4 —

Permits 4 —

Something Positive 3 6

Incentives 2 5

Networking opportunities, Inspectors 1 —

Minorities and Women — 5

N 135 106

Figure 8. Recurring words in open ended responses on the Small Business Survey.

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The first question asked respondents to suggest ways that Virginia Beach could be

“more friendly” to businesses of every size. Comments were made by 133 business owners.

The second question asked participants to “give any other information you would like the SBS to

know” and 105 people wrote comments. Respondents were allowed up to 500 characters for

each response and some comments were coded with more than one theme. Additionally, there

were a few non-constructive comments that were not coded in cases where the survey

participant complained about particular individuals or companies. The 8 top ranking themes

were: Taxes/Fees, Information, Double standard/Discrimination/Favoritism, Process,

Attitude/Competence, Training and Services, Large vs Small Businesses, Incubator/Networking,

and Internal Communication/Runaround. Five individuals compared Virginia Beach to Norfolk

and four participants compared Virginia Beach to Chesapeake. Three people made positive

comments.

Taxes/Fees .The most popular theme for the first open ended question was Taxes/Fees

with 22 comments, summed up by P55: “City and State taxes, personal property taxes are

killing small businesses in this area”. Together with the responses from the second question,

this theme had the highest number of remarks overall (34). Property taxes were coded a total of

19 times.

“Get rid of the business property tax.” (P2-19)

“I feel the tax on equipment owned by the business is unjust.” (P2-11)

Business license taxes were cited 15 times.

“The gross receipts/privilege tax is antibusiness and should be abolished.” (P2-41)

“The business asset tax is excessive.” (P2-14)

“The taxes that are imposed on all businesses by the City of Virginia Beach are

becoming overwhelming. Especially the property taxes and business license taxes.”

(P2- 26)

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“Tax rate over $100,000 is outrageous! My taxes went up 500% because I worked

harder, and made a few extra grand” (P2-55)

“I moved to Chesapeake because of the constant Tax headache the City of Virginia

Beach was to my business.” (P2-56)

Excessive fees were mentioned by 6 individuals; the burden on new businesses was identified

by P2-72: “Every agency in the City and State has their hands out for some type of fee. It costs

so much in fees and special taxes just to get started. It was frustrating to say the least”.

“There are so many fees that are nothing but another form of taxation. (P2-75)

Large vs Small Businesses. The highest rated response on the Likert scaled questions

reflected a belief that Virginia Beach prefers large businesses over small, and 26 comments

were counted for this theme overall. Several pointed out the discrepancy toward larger

businesses:

“… these people think a win for VB is a huge business/restaurant chain. A win for

Virginia Beach is a strong healthy small business scene.” (P2-80)

“I understand incentives are an important part of attracting new business to the area. But

it really cuts deep when you started a business from scratch and pay taxes in a city

where you grew up and see your tax money in the form of significant incentives to

outsiders to come to town and compete against you.” (P2-13)

Four respondents pointed out that Virginia Beach focuses on oceanfront business, as

expressed by P2-109, “Va. Beach's reputation is they support larger industry "heads on beds”

for tourism” and P2-92, “only gives attention to the ocean front not small businesses throughout

the city”. Some comments were coded that asked for more interest in small business:

“The City of Virginia Beach and the State of VA do not in any way encourage small

businesses.” (P2-38)

‘Please support small, local business against large out of state businesses. All things

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being equal, go with the small local business.” (P2-40)

"Pay Attention" to the new, small businesses!!! We are the backbone of the economy!!!

(P2-131)

And one participant compared Virginia Beach with a neighboring city:

“I feel the city is currently uninterested in small business. Which is why I took my

business/business opportunity to a neighboring city. That was interested…” (P2-95)

Information. Participants requested a more organized city operation for disseminating

information, as stated by P2-25: “Better outreach to small business through marketing. (inside

business, AGC, etc)”. The most common code for this theme were centralized location.

“Please put everything a perspective business owner needs to know about starting a

business in one place. (P2-47)

“Can you have one central office to help in starting a business?” (P2-51)

The second most coded item was checklist or steps to open.

“When you go to apply for a business license there should be some sort of checklist that

is given out depending on your business giving you an outline on things that need to be

done before you open.” (P2-14)

“Welcome packets filled with "where do I go from here" along with comprehensive

steps.” (P2-64)

P2-68 made a suggestion for improvement: “I think it would be great idea to hand out or mail an

information packet when you purchase your business license”.

Double standard –Discrimination-Favoritism. Survey respondents would like the city

to treat small business owners with fairness. P2-23 made it clear: “There is a double standard

that favors large businesses”. Comments were made concerning fairness in the awarding of

contracts.

“I live in Virginia Beach, and have sold to every city / county in this state, other than

8 0

Virginia Beach.” (P43)

“The good ole boy network is a huge problem. The way the city picks the winners from

the losers.” (P2-92)

Process. Eighteen participants made comments concerning process improvement.

Faster turnaround was coded 4 times.

“They don't have any idea how much stress is involved when they hold up an opening of

a business for such small things. In many cases we have our life savings on the line and

what they do is harmful for us.” (P2-106)

The expense of keeping up with city requirements is expensive and burdens small business, as

expressed by P 96: “The cost for compliance is significant and prevents growth”.

Three participants suggested that the city update their processes to conform with current

technology:

“Let us update our Personal Property Taxes online. I can never remember the data from

one year to the next.” (P2-89)

“Why am I still keeping a separate Excel spreadsheet with all of my equipment, and

mailing it in with a check every year?” (P2-77)

“When obtaining a business license for the first time, it is a hassle to go to the license

office in one building, walk to zoning in another building, and then back to the license

office to finish the transaction. I would think the license office could have access to the

same computer that zoning has to determine if a particular business is allowed to

operate in a particular area.” (P2-17)

The sentiments can be summed up by P2-76: “City departments need incentives to get

work done in a timely manner”.

Attitude – Competence. Several comments were made reflecting the attitude of city

employees; most requested better understanding.

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“Improve attitudes at the city's building and permits office. They have a king complex

behind the desk.” (P2-82)

“We shouldn’t dislike going to the city permits office because of the people working there

and their lack of wanting to help or tell you all the things you need to know. I never know

if I will be successful when I go apply for a permit or not. Flip a coin.” (P2-71)

“The city needs people who have been in our shoes to help us and not hinder us. Those

who have never dealt with the stresses we deal with just don't get it. If I had a choice at

this point, I would be located in Chesapeake or Norfolk.” (P2-87)

“The only thing I want is to be treated fairly by a city staff who is knowledgeable about

their position and roll in the city.” (P2-22)

Respondents felt that there is room for improvement through proper training:

“The front line people that interact with potential business owners are forty hour

employees and have little if any concept of the challenges of opening a business. They

seem to think everyone has the same amount of resources as they do, as a city

employee. Somehow they really need to be ambassadors for the city to grow the city's

economy. It's just an attitude that needs to be revised or properly educated.” (P2-38)

Training and Services. As reported in the previous section, respondents are interested

in training workshops. References to public resources for training and the awareness (or lack

of) were made 20 times.

“I believe if there was ways to learn more and get resources that we don’t know about in

to our hands we can expand.” (P2-3)

“Advertise whatever services you do offer.” (P2-8)

To make training more accessible, P2-62 suggested the use of technology: “Embrace virtual

technology a bit more. Biz training and/or information sharing can happen from laptops and

mobile devices. Do your best to have some offline meetings activities not during biz times of 8 –

8 2

4PM…Many of the small biz can't REALLY afford to close shop to attend an info session. Keep

it simple, one page or one site with just about everything a biz owner needs to know.” This

sentiment was echoed by P2-33: “Often workshops are held when I couldn't attend.”

Incubator – Networking. Fourteen remarks were coded in this theme. The researchers

coded these answers together because the participant focused on a ways to “grow” small

businesses. Several comments specifically asked for an incubator or accelerator:

“VB doesn't even have an incubator — we go to Norfolk for that.” (P2-19)

“..Every other city in Hampton Roads and even Franklin have an incubator of some sort.

Virginia Beach should take lead in the region on small business development.” (P2-70)

“Local incubators and accelerators and more "co-housing" offices for small businesses.”

(P2-9)

“My dream is to have several real business accelerators and well as an incubator here at

the beach in addition to what is available in Norfolk.” (P2-5)

Two participants specifically asked for networking opportunities.

“I would like to see small business networking events at low cost. I would like to see

small businesses once they apply for their license to be put on a contact list advising

them of these networking events so they can get their businesses underway and learns

from others. This support network is needed if the small business community is destined

to survive initial startups.” (P2-68)

Internal Communication – Runaround. “Communication between departments”

garnered 7 of the 11 comments in this theme, asking for “coordination between departments on

rules & requirements” (P2-2).

“If you go to 5 different officials you get 5 different answers.” (P2-80)

“One hand never knows what the other is doing.” (P2-78)

“I was given the runaround at the city office and conflicting info” (P2-106)

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Comparison to Other Cities. Respondents compared Virginia Beach to other

neighboring cities that exhibit more “business friendliness”:

“I see zero benefit to being located in Virginia Beach and would move in a heartbeat

should a better option appear.” (P2-118)

“Terrible assistance in finding zoning information, would like to keep my business in

Virginia Beach but will likely be moving to Chesapeake due to easier zoning restrictions

and assistance.” (P2-4)

“Norfolk has embraced and fostered our efforts, whereas Virginia Beach has been

lackluster.”(P2-90)

“We have found other cities (Norfolk) amazingly more fostering in our small business

niche.” (P2-109)

“It does not appear that Virginia Beach gives contracting preference to businesses

located in Virginia Beach; whereas some of the other local municipalities do (Norfolk, for

example). Perhaps this should be investigated.” (P2-59)

“Throw a nice breakfast monthly like Chesapeake! (P2-8)

Website. Four comments from participants confirmed the website observation from

Phase 1 of this study:

“VB's website is terrible! You cannot find anything you need, even with multiple searches

using different terms. The results that pop up seem never to be related to the search

terms, and the website layout is confusing and chaotic.” (P2-85)

“The City of Virginia Beach website has too much information scattered to hell and gone.

It's very hard to find what you're looking for. We should break it up and have various

departments using their own dedicated websites.” (P2-7)

Zoning and Permits. These themes were intertwined with some of the other themes:

Information, Attitude, Process, Inspectors, Training, and Runaround.

8 4

“Terrible assistance in finding zoning information.” (P2-4)

“Make the zoning & permits department easier to understand & get people there that

want to help people.” (P2-13)

Incentives. Incentives were coded 7 times. P2-116 suggested helping small businesses to get

contracts: “Open up more purchasing options to department by creating incentives for buying

from small businesses in VA Beach”.

“Offer incentives. Norfolk offers more.” (P2-51)

Minorities and Women. This theme was only apparent in the second question that asked for

participants to offer additional information to the SBS. Most comments asked for more government

assistance.

“I don't believe that the city has a true commitment to use minority and small

professional services. It's very discouraging.” (P61)

“Virginia Beach has long been more interested in providing contracts to large firms vs small

business owners. It is a well-known fact and a shame, shame, shame. Please don't be small

women and minority because at that point you will never ever get a contract.” (P2-121)

“We in the African American community need more assistants from the city of VA Beach

when it come to starting a business in the city of VA Beach.” (P2-116)

Two respondents presented the opposite view, expressed by P2-4: “I think that every benefit, set-

aside and program that the government provides women and minorities places a white-male

owned business at a disadvantage. If you're doing special things for minority owned businesses,

do you assume that I'm smarter than I am or they're dumber than I am? Either way, I don't think

it's fair to offer help to one business owner because of their race or gender and offer none to

another for the exact same reason?”

Something Positive. Nine individuals took the opportunity to offer a positive remark, thanking the

city for its efforts or offering encouragement in the quest to improve services.

8 5

“Economic Development folks have been outstanding in their encouragement and

genuine interest in seeing us succeed.” (P2-19)

“I am thrilled to see all the new efforts being activated to support small businesses.” (P2-

“We appreciate VB's desire to diversify the City's business portfolio and the emphasis on

Small business. But now we need a bit of infrastructure behind the message to actually

support it.”

“Thanks very much for what you all are doing already for us.” (P2-58)

“It’s a mess, good luck” (P2-73)

A number of the recurring themes found analyzing participant comments can be summed up by

P2-77:

“The barriers to entry starting a business are the lowest they have ever been, but the

government side isn't keep with the times. I can run a business from my iPhone… take

payments, accounting, social media, and nearly everything else. The process of taking

that idea live then requires lots of searching on old outdated websites, going into offices

and asking questions like a clueless person, and spending lots of time finding the info

needed to comply with regulations, zoning, taxes, etc.”

Proposed Model for Virginia Beach.

The results of the survey were consistent with the recommendations made by

entrepreneurs in the initial interviews. The initial model developed in Phase 1 was updated to

reflect the two larger factors identified: (a) helpful for small business startup and (b) encourage

business expansion. The third factor, “city taxes” would need further exploration in a future

study to indicate an independent category. Based on the comments made by participants, “tax

breaks” was added to “encourage business expansion” because most off the comments were

related to the business license tax which is tied to business volume and therefore, associated

8 6

with growth. The revised model for business startup and growth is shown in Figure 9 and

provided the foundation for Phase 3 interviews.

Figure 9. Virginia Beach survey results: Components for business startup and growth.

S m

a ll B

sin e

ss S ta

rtu p

a n

G ro

w th

in V

Helpful for Small Business Startup

Helpful Employees

Clear Steps

Inspectors Assist

User-Friendly Website

Streamline Process

End Favoritism

Encourage Business

Expansion

Focus on Small Businesses

Aware of Public Services

Education

Mentors

Incentives

Compared to Other Cities

Tax Breaks

Networking

Incubators

8 7

Phase 3: Interviews with Entrepreneurs who used Public Business Resources

Themes from Interview Questions. Entrepreneurs who used public resources to start

their businesses were interviewed to confirm the model developed in Phase 2. Several of the

participants had experience opening multiple businesses. Codes were developed using the

same process outlined in Phase 1 of the study. Three researchers coded the data and reached

consensus on each theme (see Table 17). Of the original 17 codes established, four were

collapsed into the13 codes that were retained and relabeled. Figure 10 illustrates the themes

that repeated in all three phases of the study; the most discussed topic was the need for

information.

Table 17.

Summary Table of Themes, Phase 3 Interviews

Thematic Clusters Codes Number of Comments

Information Where to Start Concierge/Hub User-Friendly Website Checklist

13 7

11 9

Process

Streamline Customer Service Understanding City Employees

11 3 5

Small Business Attitude

Incentives-Tax Breaks End Favoritism Attitude

9 4 8

Training

Learning Mentoring Networking

11 6 4

Services Incubator Independent District

9 3

8 8

Figure 10. Themes from Phase 3 interviews. All of the entrepreneurs had a positive attitude toward Virginia Beach for conducting the

Small Business Survey and were eager to assist by participating. The sentiment is summed up

by P3-2:

“The city's mantra should be to enable [entrepreneurs] to be successful in the city of

Virginia Beach. I don't think that they haven't wanted to but I think they just haven't

focused on it….Today business is different and the consumer has changed it is more

competitive than ever. There's a certain freshness that comes with having new

businesses, particularly in a resort area.”

Information. The majority of coded comments clustered around the need for

information. Participants explained how new business owners don’t know where to begin or

what to do. Where to start, concierge/hub, user-friendly website, and checklist made up this

thematic cluster.

Where to Start. The most recurring theme was labeled “where to start”; 12

entrepreneurs expressed a need for information because new business owners don’t know what

to ask:

8 9

“I think that some people just don't know–any of it. How the smaller details work.” (P3-

11)

“A new business wouldn't know unless they asked, and how would they know the right

questions to ask?” (P3-10)

The consensus was that the government process is a mystery to nascent business owners and

there is currently no clear place in the city to find the answers.

“I get calls all the time from people who are thinking about opening here and they don't

know where to start when it comes to city government. The first thing would be to make

it easy to access whatever services are available.” (P3-2)

“…maybe I didn't do a good enough job seeking things out, following the bread crumbs

and really working hard to figure out how to start a business here. I think having little or

no experience with that, I was looking for the green neon sign that said “hey come here

and you will grow your business”. (P3-13)

Having information about government requirements is important in the startup process,

as P3-7 commented, “Right off the bat you have to hire a real estate attorney. You have to hire

attorney to walk you through the city process. The cost of doing business”. Pointing out that

there aren’t “any directions out there about that”, P3-11 called it “trial and error learning”. Some

mentioned existing programs that are available to help entrepreneurs, yet they are not well-

known:

“There are so many programs out there to help startup businesses, but if you are not

connected to organizations like 1,000,000 Cups, or all these other—Business Gateway,

Women in Business, you know, there is a bunch of them. But if you don't know about

that, then you have no idea what you're supposed to be doing.” (P3-12)

Most felt that having better information before opening a business can reduce the strain felt by

people who shouldn’t have started their business in the first place:

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‘There are many businesses that do not understand the process it takes to get into

business and the financial wherewithal needs to be gone over with some because there

is more loss starting a business that is not financially sound and just saying "I am not just

ready at this time". (P3-5)

Regarding zoning requirements, P3-3 said that these are “questions you need to find out before,

not after” starting your business.

Every participant interviewed agreed that having city demographic information available

would help business owners. In the vein of “they don’t know what they don’t know”, P3-12

remarked, “you have to be a business person who understands why [understanding

demographics of an area] is important…the new business owner—is he even introduced to

that?”

Concierge/Hub. Following the thought that entrepreneurs need helpful startup

information, 7 people described the need for some type of “ombudsman” (P3-5 and P3-3),

“startup representative, a small business concierge” (P 3-3), “liaison” (P3-11), or “point of

contact person to help them navigate the system”.

“[Entrepreneurs] often get discouraged because they don't feel like they have, kind of

that single point of contact. I think it's a wonderful position to have, someone who is a

specialist to help facilitate the process. If they were considering having a retail specialist,

that would be a huge competitive advantage. Huge. Our vacancy rate isn't too high, it is

our success rate, the turnover, and the enabling of staying in business piece. I see this

in my work with retail alliance over the years, trying to find someone for assistance –

people get in trouble a lot of times before they raise their hand and ask for help-steps

along the way to be successful. I don't think it is the role of the government to run the

business, but to have resources and make it user friendly. People can learn from each

other.” (P3-2)

9 1

“They should have an ombudsman there if they want to be ‘open to the public’ and really

encourage small business. There should be a desk in City Hall. And everything should

be centralized. That would really release a lot of anxiety for new business people. There

should it should have a few paid people, and it should have some trained and screened

volunteers.” (P3-5)

Participants explained that the average new business owner does not understand the function

of economic development and wouldn’t know to go there for help.

“For someone like me who isn't familiar with the language of economic development,

and this business center and that, it's all a little confusing-you don't understand that

economic development, “this is where I go when I'm starting a business”. Here's a

breakdown before you can get there. Like those services might be there but you don't

know that this is where you are supposed to go if you are not already a savvy person

that is starting a business. And I think that sometimes people don't want to admit that

they don't know that information. That reaffirms that the blinking light that says “this is

where you should come”… There needs to be a place where people get their

information.” They could say, “hey, this is the hub. We are Virginia Beach. Do you want

to come here and work with us? We are glad to have you. Here's where you can really

find authentic sources”. Because everyone is leery about what they find on the Internet.

There's StartWheel, there’s Gov2Com; is one of them for mom and pop businesses? Is it

for the government? Can I use both? Can I be involved in both?” (P3-13)

P3-12 suggested that “whenever they open a new business in the city, [the concierge could]

connect with the new business owner, sit down with the business owner and tell them things

that the city can do for them. Or have an orientation session once a month at one of the

restaurants here. The restaurant may cater it for free to let the new business owners know that

they do catering. The city needs to let us know about their services.”

9 2

“How about an advocate between you and them? An advocate between you and the

government. If I'm going to start out, they are the ones that know the Cobra rules and the

building rules.” (P3-8)

User-Friendly Website. Ten people made comments on the city website which “needs to

be updated” (P3-4). Two people had never visited it, P3-9 called it “a last resort for me”, and P3-

6 explained that “[business owners] don’t trust the city to give them business advice”.

While calling the importance of the city website “huge”, P3-13 wasn’t sure which website

belongs to Virginia Beach:

“Before you ask the next question though, I am not 100% sure what the city website is.

Is it just YES Virginia Beach? Is it Hampton Roads Chamber of Commerce? What is the

city website? I definitely been to vbgov.com to pay my personal bills, but I wasn't exactly

sure if that was the same place you go for a business license and stuff like that. I got

referred to “yes Virginia Beach” by the Chamber of Commerce-I was a little unclear

about what the site is.”

P3-1 explains it this way: “I think the website is out of date and hard to use. From a user’s

perspective, you know as soon as you get there that you are on a government website.” the

interviewees agreed that in today’s economy, people expect a completely different experience

when they visit a site to get information.

“I recently went to the website and I can tell you that it really didn't make much of an

impression on me [laughs], that's an impression by itself. And right now I think it could be

improved. There is nothing compelling that would make me think, "wow they really want

retail". It's very stereotypical government.” (P 3-2)

“From an organizational perspective, it doesn't really flow the way a lot of sites, there is a

lot of, content there. A lot of this stuff is available but you have to hunt for it. And one,

9 3

small businesses are already in overwhelm and “what do I have to do?” The last thing

they should have to do is to hunt for stuff. I tend to avoid [the VB website].” (P3-11)

Several participants described a more user-friendly page and that “information should be easy

to find and centralized” (P3-11) that “they should move towards a cluster of apps that are

designed specifically for what we need to get done…designed from the user’s perspective. Not

the government perspective” (P3-1). Two participants noted that a larger font is needed:

“It's got to be simple that my grandmother can do it. And they can't see something less

than 14 font. And they are not going to scroll down. If they don't see it on the first page,

they are not going to read it.” (P3-12)

“Plus, the older we get, the smaller the print looks. It's not that easy for us.” (P3-11)

The entrepreneurs offered ideas for improvement; P3-11 suggested “more video or and

testimonial from some of our entrepreneurs”, a point that was elaborated by P3-2:

“I've been talking to people coming down from Pittsburgh, and you see this static site

instead of pictures looking out the window, or here's some success stories for retailers, I

think a lot of retailers would volunteer to be on some kind of a forum just to get their

name in there. They could say “hey, we came here seven years ago”, testimonials.”

Three interviewees discussed a page that simplified the business startup process.

“They could add a dedicated website, you know, starting the process. They could list

may be 10 different markets or industries. Like manufacturing, they click on that and they

would list everything that's required like how to get a business license, how to do this,

how to do that, maybe a 3 or four step process. Something that outlines what a person

needs to do so that they can go into it knowing exactly what is needed and not after-the-

fact.” (P3-10)

Overall, they all agreed that more is needed on the website if the city wants to have the persona

of business friendliness.

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“When you are doing things electronically, you need to act like a human. On the city

website, it says “for information call, 627-blah blah blah". You know what, why do I even

go to the website when that's all that I get?” (P3-5)

“Everything from permits, regulations, to starting up, even going out of business. If we

had something that was kind a like a real user-friendly website, that says, ‘here are the

points of contact’, that anticipated the questions.” (P3-2)

Checklist. To assist new business owners, nine people agreed that the city should

provide some kind of checklist, also calling it “a how-to kit” (P3-11) and “Business

persons startup kit [that explains] kind of the who, what, when, where, how”. (P3-3).

“Make it idiot proof. Just to have a generic checklist, starting from the top: get your EIN

number, next you get just a sequential checklist, just to go through. When I had my

consulting firm out west, it was a given for me. For somebody doing a fresh start up,

that's not true. People forget to do their taxes. They forget to get an EIN number. They

forget the structural things that if you had a checklist that said phase 1, phase 2, phase

3, make it idiot proof, make sure you check the boxes. The information is in various

places but it is not in one place as a checklist.” (P3-9)

Participants repeated their comments made about the website and felt that the

information should be available in multiple places and should address requirements by type of

business or industry.

“There would be a lot of variance in the list. You would have to do retail, you would have

to do consulting, have to, it would be a hard list to put together. Because even in

consulting you would have to target, I mean you could do it. Make a decision tree out of

it. The decision would vary between the types of industry. You'd almost have to target it

by age, too. “ (P3-8)

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“Yes, for those who have not previously been in the waters being an entrepreneur, it can

be a generalized process that is outlined or it could be more defined, depending on what

industry to startup is in. It would be different for every industry, I would assume. There

could be a generalized outline that could help every company.” (P3-10)

P 3-13 suggested “creating an app” and P3-3 outlined a procedure that would make the

process better experientially for both the business owners and the city:

What if the economic development, city of Virginia Beach, they had a special place on

their website- you as an entrepreneur could login and see the progress of every

department involved. Economic development sends out an email to all these offices and

they already know who you are before you get there. And you go down the checklist and

each city department signs off on it as they go down through it.” (P3-3)

The entrepreneurs felt that this solution is necessary and ultimately will be very helpful

for new business owners as well as save them money:

“They are not doing that now! ODU pays people to do those steps to open a business.

The rudimentary things. And there are plenty of companies out there that charge $799,

$599, to do these things for you…they cost Nothing!” (P3-12)

Process. The business owners interviewed agreed that a smooth process would assist

entrepreneurs starting new businesses. Codes in this cluster included streamline, customer

service, and understanding city employees.

Streamline. The need for a more streamlined process was unanimous among the 11

entrepreneurs who had opened a brick-and-mortar location in the city. People called for better

directions up front, because “people really do not know which permits they need” (P3-5). P3-9

called for “a generic list and then a different one if you're building something; [including] subsets

of lists”. Apparently, getting the permit is not the problem, it is the lack of information that is not

available up front:

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“Once you get a permit to open a business, the average person thinks you are finished.

Then you learn later, most often by a phone call or a letter saying that you need to be

signed off for construction, then you have to be signed off for fire, and all of that happens

later; when a permit person gives you the business license, they often times don't tell

you this. Then it becomes disconcerting. The streamlining process could take some of

the angst and an anxiety out of this by saying "this is what you were going to expect

next, The inspector is going to come to your store, the fire marshal is going to come to

your store," .. No, that part is not done.” (P3-5)

“[I did have an issue with that], building my wife's clinic, I skipped one of the permits. Do

I need to have a framing permit because it is a vanilla structure? One would think you

don't. You do. They wanted to count the number of screws we put between the drywall in

the metal studs. I didn't know that I needed that. No, I had to have the guy come back in

and get a certification from three different people and hand present it to him and he said,

‘OK, we're going to get a sample’, and did a metal detector- but he throws me for a

couple of days. Lot of pucker! Lot of pucker. The clock was running down.” (P3-8)

Respondents felt that the city offices could coordinate better with one another and revisit some

of the rules on the books:

“I know that I've had frustrations when I opened my office. I have an office condo. Just

trying to get the place inspected so I could start working in here, they said I couldn't start

working until all six offices were open and inhabitable. That wasn't going to happen for

three years. The permits and things, they have got too many antiquated rules that they

need to look at.” (P3-4)

Frustration with the process was a recurring theme. Delays cause financial burden on

entrepreneurs, who do not typically have large cash reserves and discourages new business

owners.

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“Usually they are pretty helpful but sometimes it can be pretty frustrating.” (P3-11)

“When it came to building permits that was ridiculous. It took nine weeks for us to get a

building permit. After you get the conditional use permit, basically your design has been

approved by the city. And when you go get your building permit you have to show that

you are up to code. Apparently they were getting busy and had some apartments going

up that time and we're getting back-logged. Nine weeks to approve. And at that point you

know I'm paying rent. It's a few hours work for them to approve and I respect that but

cost me quite a bit of money. And starting out, you're not really flush with cash, so it's

been painful.” (P3-7)

“I have talked to so many people that were so discouraged before they even got started

because the person, they felt like they were doing them a big favor. Streamline it, make

it user friendly, give them everything they need on one visit. But more than that it is not

even just about the process, most complaints I get are about that real bureaucratic, ‘you

have to do this, you have to do that’. I think the permits are there for a number of

reasons and you have to understand why they can benefit them and how they can

protect them.” (P3-2)

One person recommended that the city should try to do the process themselves:

“A city doesn't make or break a company, but they can make the process difficult for

someone not to want to do things in said city. So if the city is interested in doing all those

things, they should backtrack and try to do it themselves and see if those things are

easy.” (P3-6)

Customer Service. The term runaround recurred with three interviewees, who described

having to go back and forth between buildings. P3-5 feels that “the right-hand didn't know what

the left hand was doing and often times when you were referred it was really just to get you out

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of the line and push you somewhere else and the other person was equally not attuned to what

you were looking for.” P3-2 called for more simplicity:

“When you start the maze of permits, and where to go, in which building…. So many

people make it so complicated. It's a cumbersome run around.” (P3-2)

This code was collapsed in the final model and is covered by “streamline” and “understanding

city employees”.

Understanding City Employees. Although 9 of the interviewees acknowledged that they

have had good dealings with city employees, 5 individuals made suggestions for improvement.

The respondents felt that it would be helpful for startups if the city workers had more empathy

for entrepreneurs by understanding what they experience opening a business. The recurring

theme was that the attitude starts at the top:

“People say "I don't think I want to be here, those people of the city are so mean, they

weren't engaging." I think that comment any time a person is thinking of investing in the

city, the attitude of the person on the other side-because this is going to be their tax

dollars that are paying them. And I don't think that's the overture, that’s where they see

themselves… And that's a matter of repositioning. Somebody in the city government has

to believe it first.” (P3-2)

“ I think most of the people in economic development are doing a good job and are trying

to be helpful. What would be nice is to have somebody who can go in to the city

employees and teach them, “this is what a startup looks like, you need to take baby

steps with them”. Don't stick your nose up in the air and say, "well this business is

not…", be encouraging. If you're in permits, for instance, be helpful. I think it's just a

matter of training and having the directive that comes from the Mayor or the city

manager that says, "you know what, we want to support entrepreneurs and startups and

we need everybody down to the last little clerk to be helpful for the startups". (P3-3)

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The importance of customer service was emphasized and P-3-2 compared it to the “hospitality

business” that the beach is known for. If Virginia Beach wants to be known as small-business

friendly, the first interaction the entrepreneur experiences is very important.

“That's absolutely important, especially to help the business owner at the business

license place. That is their first interaction with the establishment, the bureaucracy of the

city. And for them to get anything other than total help, I mean you have got to have the

real people there who can handle some guy, you know some kind of like. a baby in a car

seat.” (P3-12)

“City employees, and every city in the world, should run like a business and make sure

that customer service is like, the most important thing. Because at the end of the day,

you can be the best customer service-based business. We have to realize that we are in

business with people, every step of the way, and we have to take the steps that

customer service is important. So it's extremely important”. (P3-6)

One respondent had good experiences with city employees but problems with permits:

“Would say [the city employees] are all very helpful. Permitting was, they don't give a

shit. They are just doing their job. You have to keep following up. After a while I would

just drive down there and asked them “hey, what's going on? What's going on?” It's

costing you money that you may or may not have, you've got to get going on this. Trying

to get in here by the end of the summer. City Council took the day off because it

snowed, and that cost me another 30 days.” (P3-7)

Small Business Attitude. Participants expressed the perception that policymakers

prefer large businesses over small businesses. Originally labeled “prefers large businesses”,

this cluster was renamed to present a positive focus; the interviewees would appreciate efforts

made by the city to embrace small businesses.

“If you're trying to nurture small businesses, that's pretty huge.” (P3-7)

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This cluster includes incentives-tax breaks, end favoritism, and attitude.

Incentives. The Virginia Beach Small Business survey indicated that local business

owners that the city believe that incentives are reserved for larger businesses, revealed in the

interviews by P3-4, “[the] resources economic development has, I mean they're looking for

bigger stuff, mostly bigger than what we do”. Although two interviewees were neutral on

incentives for small business owners, the remaining people had ideas for offering something to

entrepreneurs. P3-7 called tax incentives “massively important, when you look at it” and P3-12

felt that tax credits should be offered to individuals who work for them:

“People who are serious need to do the work; to get these tax credit you will have to join

the training or take the workshops. If you are not serious, that's OK, but don't waste our

time. We want to work with the people who are serious.” (P3-12)

Most of the ideas offered involved a five year plan that has a graduated path to assist new

business owners in the beginning:

“Make it attractive [taxes] for the first five years. Or make it attractive for a first period of

time. I would picture that as no tax for the first two years. Followed by a gradient for the

third year and if you make it to five but you are going to pay everything, for the first five

years you incentivize a business to locate in Virginia Beach.” (P3-8)

“Give them a couple maybe three years of tax incentives, maybe other things, and it

keeps coming back to you. If you can keep veterans here, veterans pay more taxes on

their retirement. They need to incentivize the hell out of those guys. You tell veteran that

they are not going to pay state taxes for five years, they're going to stay.” (P3-4)

“A new small business, there should be a five-year plan. They should have an

abatement of two years to let them get off the ground where it is tax-free, and the third

year to the fifth year should be prorated amounts and you get back to normal status on

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the fifth year. Basically that corresponds with people that take five-year leases out. If by

the fifth year you are not making it, it is your problem.” (P3-5)

Overall, the ideas suggested justifying the incentives or tax breaks; that the recipients had to

“give to get” and that the city should be part of an integrated strategy:

“[Find] a way to provide financial incentive (tax breaks or awarding of contracts). There

should be some way of measuring the overall affect, a ROI. It’s like a capital investment

of a business. There should be a strategy in place so that the incentives are designed to

achieve a result and they have a way to monitor the result. [They should also] be

supportive of small business and new businesses that are growing. –give a tax incentive

with Stihl if Stihl is working in some way with a small business. There should be an

incentive for a big business to work with the small.” (P3-1)

Business owners feel that they pay “lots of taxes. Pay a tremendous amount of tax here” (P3-7)

and ‘from a small business perspective, both for my business and my husband's business, I feel

that that we really pay a lot of money on taxes. A lot.” (P3-11).

“The city’s job is to find the clusters of business are doing well and help them.” (P3-1)

End Favoritism. Making comments that aligned with the respondents from the VB

Survey, interviewees felt that the city favors tourism and the oceanfront.

“Tourism is a terrific thing, but we need more than that.” (P3-11)

“Economic development focuses on large businesses versus small, they give you a

sense that, ‘well if I am not Amada Hoffler, I don't mean anything to you’”. (P3-5)

“What they tried to do, is to make at the oceanfront, the Mecca.” (P3-8)

“I think that, supporting the local businesses. I think the city does a lot of that down at the

oceanfront, with the tie in with hotels in Beach Street with the hotels. But in other parts of

the city, they seem much more neglected, the bread-and-butter. Period. If you got a

laundry or a dress shop over in Kempsville, you're not going to get much help. It's

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difficult because you want the government to be a, what's the best way to put it, level

playing field, but it seems like instead of picking favorites from amongst the ones that

need it most, they are picking favorites amongst the ones that are high profile. And I'm

not slamming anyone, but- [The other areas,] they are not getting anything.” (P3-7).

Attitude. Eight people made comments that were coded as this theme. The focus is not

the same as the attitude toward large businesses, according to P3-11: “looking to attract large

corporations here, the approach is very different than courting small entrepreneurial

businesses”. P3-2 indicated a lack of attention to small businesses:

“I don't want to sound harsh, but I feel that ever since I've lived here, I don't think the city

has, you know they are doing a lot of great things, it just hasn't been very pro-business

for small business. Maybe they think that score is going to take care of it, but SCORE,

SBDC, they are stressed as tight as they can be. If you think about the role of economic

development and how many millions of dollars, think if we had that vitality. I think it's a

no-brainer. I've lived here for more than 50 years and we have never seen a more trying

time for small businesses.”

The prevailing thought is that the city gives preferences to larger businesses.

“The city of Virginia Beach offers quite a lot of tax incentives for large businesses. The

travesty is that you was a tax payer pay for those relationships, but the city offers

absolutely nothing for the small businesses. Let's call this parity at this point.” (P3-5)

Everyone agreed that small businesses are important for city revenue, and some wonder when

the city will focus more on this and “be treated with respect when you are a new business calling

into the city of Virginia Beach”. (P3-3)

“I am past the shock, the cities live and die off the revenue for business sales. For some

reason, I’m wondering if they hire people who don't understand. It's a real simple

answer: be more engaged with them.” (P3-12)

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“When [my partner] wrote his first check to the city to keep the license in play, I

remember he said "they should be paying me because I am paying people". By then we

were at about 10 or 12 [employees], about two years into the business.” (P3-8)

As noted in the VB Survey by different participants, the city should recognize the competition,

the neighboring cities where businesses can locate.

“People are going to take their business where they feel welcome and wanted. It's not

an accident.” (P3-2)

Three of the participants who work in contracting noted the disparity toward small businesses in

the city.

“I think what the city needs to do is to get a rigorous small business policy for awarding

contracts to small businesses. It is very hard to get work as a small business in the city

of Virginia Beach. It has been easier for me to get work and Iraq and it has been for me

to get work in my own city-and my office is right next to municipal center. They would

rather go hire someone from Colorado or Ohio or other people. That is what they

do.” (P3-4)

P3-2 warns that without paying attention to and helping small businesses, we could see

more of them closing their doors.

“For the most part, people think that economic development is open for big business.

The oceanfront is open for business. And right now with the onset of the outlet mall

coming in, there are a lot of antsy retailers. You should help them position for success

instead of trying to be a corrective measure. They need to be positioned for small to

medium expansion. The city needs to invest in person to make this happen putting good

money after bad. We need good, vibrant retail in Virginia Beach. We have to remind

people that is our first and foremost in the hospitality business. Show some love!” (P3-2)

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Training. Participants agreed that training opportunities, mentors, and association with

fellow entrepreneurs would assist new business owners start their ventures and help existing

businesses stay afloat and grow. The codes in this category include learning, mentoring, and

networking.

Learning. “Opportunities to learn” were coded in 11 interviews and included statements

about classes, workshops, and help for businesses. Lack of experience as a business owner

leaves the entrepreneur the option to learn on their own.

“I didn't know when I hired my first HR person that there were funds available as I

hired veterans…but I didn't even have to have a HR department until I hired about 60

people [laughs]. I'm 70% veterans and of those, 50% are retired.” (P3-8)

“One thing to attract, but I think there are tons of business people already out there that

could use these things that we are talking about they don't know how to raise their hand

or how to get there. With good marketing tools, the city could market to some of the

existing businesses.” (P3-2)

The entrepreneurs interviewed felt that educational workshops for business owners are

an important resource for business owners. P3-2 feels that it is “a function of government, a

function of economic development to keep business is healthy”.

“I see this as an opportunity to make businesses successful before they open and

having resources to keep them healthy. People absorb information and a lot of different

ways and even though we are in a digital community, I am finding that even some of the

savviest businesses still want to handholding.” (P3-2)

“The sad statistic, is the number of businesses who are already in businesses and they

are failing. They need to get the help beforehand and they don't get the help at the right

time and they go by the wayside. So they should help the people that have been in

business a few years and help them before they fail.” (P3-5)

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Preferences varied on whether the courses should be offered face to face or online (or both).

“I don't know if this is an age related thing, because I am more high-touch then high tech,

I will listen to webinars and do those sorts of things but I like to get most of my

information on a one-on-one consultation . Way I can fine-tune my questions. I usually

have very specific questions and it takes me too long to sit through all of the online stuff

to get the answers that I want.” (P3-9)

“I would love to be able to participate in workshop via [Technology]. I am not able to get

that location, I would love to be able to log in and be there for all of it or part of it. It would

be so much easier.” (P3-10)

“I think [training] would be fabulous, I do. I think a couple of sessions a year on ‘so you

are thinking of starting your own business, Virginia Beach is a place to do that.’ You

know, finding a location and do a session on what that involves. I think if they had cycle

of classes that they could do online about what makes you successful; I think that that

would be tremendously helpful.” (P3-11)

People feel that the city should partner with local higher education institutions and the courses

should not always be free; business owners expect to pay for something that is valuable.

“You tell the people getting out of the service, if you want to start a business, we are

going to have a classroom, it's free, it's a one hour thing, those of you that want to start a

business raise your hand. That kind of thing. Then if you want to come back it's going to

cost you. A school, maybe ODU or Tidewater Community College would help, I bet you.

Because they love things that they can make money on.” (P3-8)

“Let's say it brews out of either ODU's entrepreneurial program or Regent’s like, do it in

some sort of combination of an educational [program] that may sponsor something like

that. Or over at TCC, someplace where they can come together and feel comfortable in

that environment, learning "here's the steps." (P3-11)

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“I wouldn't mind paying a fee to compensate for any cost incurred on their end because it

takes off the travel time and convenience is worth it.” (P3-10)

“There's another disconnect and you will love this one. And Northern Virginia who have

almost the same types of workshops and opportunities, but guess what? Northern

Virginia, every organization, SBA, All the organizations, they charge. You want to come

to our workshop? It's $100. It's $200. $75. Down here, most of these things are free.

They're free! Now, obviously you can argue both sides. And I'm not saying that you need

to charge, that's not only worth my time, it's worth my money.” (P3-12)

One participant noted that the training received from the Virginia Beach contracting

Institute was helpful; “they have two rounds of nine hour courses and a great wealth of

information. Out of that process I got it very clear that that was not my market, so it was very

useful for me.” (P3-7)

P3-12 laid out a plan for Virginia Beach to carry out:

“Here's something else that the city ought to offer. When you get that business license,

first of all, you shoot that emergency email to one of those economic development guys,

and you say ‘hey, congratulations on your business. Our sole job in Virginia Beach is to

make sure you are successful and you achieve the goals that you want to achieve’. Now

on the attachment is: ‘three workshops coming up in the next month:

 How to start your business

 How to file for the EIN number

 How to do this, that’

And guess what? 90% of those workshops are already offered and they are offered for

free. You're a veteran, there's even more free stuff. You could say, “here are the

workshops, here they are. Heard of the Tidewater Association of Contractors?” And on

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and on. It's doable. They are already out there. You need to have the presenters who

are dynamic and unbelievable. Need to capture the mind of the entrepreneur.”

Mentoring. Although six people offered opinions regarding business mentors, most of

the interviewees did not feel that it was the city’s job to provide them. P3.1 said, “I’m not sure

the city can give advice, but they can probably facilitate the mentor protégé process” and P3.4

feels Virginia Beach can “be a catalyst for that in some way.”

“I think [having mentors is] awesome. Before doing this, I thought, no, that's on each

individual person, the responsibility for growing the business, they should figure that stuff

out and get their own mentors. But the more that I get involved, there is lots of

organizations that provide those types of mentors. And I think that if the city would get on

board and say “here's where you can get your mentors, here's the hub; that would set

them apart.” (P3-13)

“There's so many other things, programs out there. You don't want to duplicate, you

want to make things effective.” (P3-4)

“I think like, that Million Cups thing offers a tremendous opportunity there. That type of

thing. You really need mentors outside of the city to do that. If there's a matching service

or something; that would be really cool. Especially, you get like smart business guys,

whatever, but having specific knowledge of an industry is really helpful for us. You know,

you get warned how bad it's going to be. I was literally working 100 hours a week to

maintain production. Was not fun. It was not fun at all. It's a 24 hour job. You know, even

if you're not there, you're there.” (P3-7)

Some mentoring relationships do not turn out well:

“We were offered a mentor in the first six months. The mentor I had, I heard from him

once and I never heard from him again.” (P3-10)

P3-6 believes the job is suited for experienced entrepreneurs:

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“They haven't done it themselves. But I think they can create programs that people can

help them with, but I don't think that a city, or anyone, should be giving advice on

anything that they haven't done themselves.”

Networking. The entrepreneurs interviewed would like to see opportunities to network

and learn from other entrepreneurs.

“It would be awesome if there was some kind of connection point where someone could

say, okay you're a new kind of business, you were a new vendor, something like that. A

networking opportunity, something available monthly or quarterly.” (P3-13)

“Being able, being able to even like, sharing horror stories with the guy next-door and a

collegial attitude with everyone. Giving that opportunity encourages everyone to do it.

You say, if he did it, I can do it. Like the breweries that are popping up everywhere, if he

can make it I can do it.” (P3-7)

“We could be assigned to our industries and if there were companies where to connect

with certain industries because it makes sense that would be good for networking. Going

into it, provide your email, wanting to receive information about different industries or

different companies within certain industries. You would have to agree to that of course.

It would be help full as an entrepreneur to be available to other business owners to give

advice. If I could help them, I will. I would like to talk to other manufacturers in the area.”

(P3-10)

Some of these opportunities exist, but awareness level is low.

“There are so many programs out there to help startup businesses, but if you are not

connected to organizations like 1,000,000 Cups, or all these other—Business Gateway,

Women in Business, you know, there is a bunch of them. But if you don't know about

that, then you have no idea what you're supposed to be doing. It is the same with if you

are a doctor or a lawyer or some other profession, you need to be connected with your

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professional group. And the fact that people think that they can start a business on their

own…” (P3-12)

Support. Two themes were identified in the interviews that were included in this cluster.

Entrepreneurs discussed how the city could support local businesses by providing an incubator

or by developing an “independent” district for local specialty stores and restaurants.

Incubator. Though 9 people believed that it is time for Virginia Beach to join the

incubator scene, P3-2 thought it wasn’t a priority, P3-13 didn’t know enough about them, and

P10 had no opinion.

“I think there should be an incubator and maybe there should be an Accelerator. I don't

think, as much as Hatch is great, I don't think we should all have to go to Norfolk. I'd like

to see a Hatch in Virginia Beach.” (P3-9)

“Don't they have Nest in Norfolk or something like that?” (P3-7)

Most agreed that the city did not need to “reinvent the wheel”; they can tie in with other

organizations that are doing something similar.

“Maybe the city could give people a meeting space or something like that. Entrepreneurs

tend to be very suspicious and very skeptical of government agencies. These are

economic/MBA people, not boots on the ground people. I believe that Hatch fills that

space already. They can co-brand an event with the city.” (P3-3)

“Yes, would I like to see one? Yes. And I think it is going to take being innovative on how

to get it started. I would not start it through the city, I would start it through some sort of

private enterprise. Look at what Zack has done [with hatch] and replicate it in Virginia

Beach.” (P3-9)

Co-working spaces, where the rent is low, were suggested by P3-9 and P3-6. Virginia Beach

could follow a model that works in other cities, as outlined by P3-4:

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“The city needs to do an incubator and the perfect slot is out there with Old Dominion

and Norfolk State, that complex out on Princess Anne Road, together with Tidewater

community college. You get all three of those universities which are within 200 yards of

each other, put in an incubator in there, with key objectives, that is funded. Some could

be working on their capstone projects or on patents. That business model works really,

really well out at Caltech and MIT.” (P3-4)

Another detailed plan was presented by P3-11:

“Let’s say there is a competitive arrangement, or competition to get placed into the

incubator or something based upon Economic Developments’ priorities. Find the ones

you liked based on criteria-fit and they get, say, 24 months to go through this incubator

process before they get to the point where they could move out and stand on their

own…I think that it should be based upon some of the priorities that they work on

supporting and developing, based on either the types of locations that they want to fill, or

the areas of innovations they are looking to drive. So I think that you can have more than

one incubator. I definitely think a mentor-protégé type relationship would help drive

success. Find something that is not rented out yet for some reason. Maybe a landlord

who has some space, they can get a grant from the city to sponsor an incubator. Maybe

those people could get something from the city for hosting in there. Bring in some folks

who want to mentor in that space; for community development that would be great.”

P3-6 feels that the city should help provide the space and leave the rest to the participating

entrepreneurs.

“They should just focus on getting people around each other, and nothing else. The

education should be done by people who have done it before.” (P 3-6)

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Independent District. Three people feel that the city can improve small business in the

area by designating a shopping and dining area in the city that caters to independent

businesses.

“Virginia Beach has a helter-skelter plan for growth, unlike Norfolk which has Ghent and

21st St., for instance. I would try, for the growth of Virginia Beach, to create an

independent district [for small businesses]. Independents fail summarily and they are

put in a center next to a large chain, might as well throw their money out of the window

at that particular point. A good example of a place that does this right is Naples,

Florida.” (P3-5)

“Think if you could get a geographic grouping, that's massive. Because you can

revitalize in area.” (P3-7)

Final Recommendations by Participants. Two new requests were made for the city’s

consideration, one to offer more digital services and one to clarify contract work:

“A lot of people are working on their mobile phones now. I would like to see more of my

services moved to my laptops or phone.” (P3-1)

“With the city needs to do is make a decision on what small business certifies they are

going to have. They haven't done that.” (P3-4)

P3-2 recommended that Virginia Beach establish liaisons with shopping center developers to

get the word out that they are prioritizing small businesses.

“They probably need to do a campaign about what they are doing [laughs] because I

think a lot of people don't know are doing anything. I rarely hear anybody talking about

going to the city for help, anything to do with retail. And it's not just about what they can

do but about making people aware of other things that are being done- through the

entrepreneurial center, Retail Alliance or other economic agencies…SBDC, is a

wonderful organization. I think the rule is more of helping to package it. And then to tell

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people what do these [organizations] even do? Sometimes grants are available. Average

small business owner, they cannot navigate the waters of big government, so they throw

up their hands and do nothing.” (P3-2)

If the City of Virginia Beach wants to extend the attitude that they are welcoming to small

business, P3-9 describes how they must develop a “mindset, a mentality of supporting

business”. A vision should be developed and facilitated by city leaders:

“The question is not what is your vision, it is do you have a vision? I don't think that the

city has defined the vision, the importance, and the dynamic that comes with retail.

Doing a project like this will only have traction if it comes with a vision. You have to find

the vision you have to sell the vision and you have to put someone in there to facilitate

the vision. So what is the vision? The visioning thing really has to start from within. They

don't need to say something that they are not going to act on or fund. This should be

thought of as an investment in the future and a very prudent investment, quite

frankly.” (P3-2)

Virginia Beach is a city where people want to live and locate their businesses; if the leaders can

organize the resources better, more small businesses can thrive and make it.

“I think people want to be here. People want to be in Virginia Beach. I think sometimes

people think “I'd like to stay close to Virginia Beach but I might have an easier time in

Chesapeake or Norfolk”. But I wanted the close to Virginia Beach and want to stay here.

As for me, I want to be in Virginia Beach. There is a draw here, so how do you compile

the resources that you have and provide some sort of gateway that can filter people in a

way that not just saying- “oh yeah, go over there, but this is where you want to be and

you need to talk to this person”. Maybe there needs to be more of the walk alongside,

instead of just pointing, pointing, pointing.” (P3-13)

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Figure 11. Themes from three phases of the study.

Model for Virginia Beach. The themes that emerged from the three part mixed method

study shown in Figure 11 were used to develop the final model. The thematic clusters identified

in the third phase verified the findings from the first two phases and were used to develop a final

model for the City of Virginia Beach (see Figure 12).

Concierge/Hub

User-Friendly Website

Checklist

Streamline

Customer Service

Understanding City Employees

Incentives

End Favoritism

Attitude

Networking

Learning

Mentoring

Incubator

Independent District

Interviews:

Confirmation

Taxes – Fees

Information

Favoritism

Process

Attitude – Competence

Training and Services

Large vs Small Businesses

Incubator

Networking

Internal Communication –

Runaround

Other Cities

Policy

Website

Zoning

Permits

Something Positive

Incentives

Networking opportunities

Inspectors

VB Survey:

Open Ended Questions

Helpful employees

Clear steps

Helpful Inspectors

Website Information

Large Business' Impact

Prefers Larger

Inform/Encourage Use of resources

Awareness of Public Resources

Education or Mentors

Incentives-VB

Compared to Other Cities

City Taxes Inhibit Growth

VB Survey:

Likert Questions

Online research, visited competitors

Sphere of influence

SBDC, SCORE

Mentor

List of steps to open a business

More information

Tax incentives

Business incubators

Advice on how to get started

Simplify / Streamline

Give clear directions/ start-up list

Make information available online

Runaround-Wasting time

Poor communication between departments

Focuses only on large businesse

Make it difficult,don’t care

Interviews:

VB Entrepreneurs

Phase One

Phase Two Phase Three

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Figure 12. Model for small business startup and growth in Virginia Beach

S m

a ll B

sin e

ss S ta

rtu p

a n

G ro

w th

in V

Support Small Business Startup

Information

Concierge/Hub

User-Friendly Website

Checklist

Process

Streamline Process

Understanding City Employees

Support Small Business Growth

Small Business Attitude

Incentives

End Favoritism

Attitude

Training

Learning

Mentoring

Networking

City Support

Incubator

Independent District

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The code “where to start” was collapsed into “concierge/hub” in the model. Using the

model developed in Phase 2 of the study as a guide, the clusters were associated with the

factors identified in the factor analysis: (a) helpful for business startup and (b) encourages

business expansion. For the final model, these were renamed: (a) support small business

startup and (b) support small business growth.

Summary

The problem of this study was to encourage entrepreneurship by identifying the

resources that support business startup and growth. To address the research hypotheses, the

researcher conducted a three phase study. In the first, qualitative phase, interviews were

conducted with 10 entrepreneurs to explore the needs and use of resources for business start-

up and growth. The data were used to develop a preliminary model and subsequently a survey

instrument for the small business population in Virginia Beach in the second, quantitative phase;

351 business owners in Virginia Beach participated. The data were analyzed using descriptive

statistics and a factor analysis was performed to validate the instrument for future studies. Two

factors were identified, (a) helpful for business startup and (b) encourages business expansion.

Both factors had high reliabilities, Cronbach’s α = .78 and .81 respectively. A model was

developed from the Phase 2 data.

The third, qualitative phase of the study explored aspects of public business resources

identified in the Virginia Beach Small Business Survey as most helpful or needed for

entrepreneurs. Thirteen entrepreneurs representing small businesses in the city who have used

public services for startup assistance were interviewed to validate the model developed in the

second Phase. Participants identified services that are missing, recommended how the city can

improve the use of services offered, and made suggestions for making Virginia Beach more

“business friendly”. The interviews in the first and third phases followed phenomenological

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tradition in qualitative inquiry. Participants in Phase 3 validated the model and slight

modifications were made to establish the final model.

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CHAPTER V

Summary, Conclusions, and Recommendations

This study examined the resources and assistance that public agencies should offer

in support of entrepreneurship. This chapter summarizes the study, presents conclusions

based upon the findings, and provides recommendations for future studies based upon the

results of this study.

Summary

The purpose of this study was to encourage entrepreneurship by identifying the

resources that support business startup and growth. The mixed method study was guided by

seven research questions. Phase 1 was guided by the first two research questions:

RQ1: What are entrepreneurs’ informational needs for business startup and growth?

RQ2: What resources do entrepreneurs seek and use before starting up a new business?

Phase 2 was guided by research questions 3-6:

RQ3: To what degree do entrepreneurs perceive Virginia Beach as helpful in the process of

small business startup in the city?

RQ4: To what degree do entrepreneurs perceive Virginia Beach as supportive to small

business expansion?

RQ5: To what degree do entrepreneurs utilize training services offered by the city?

RQ6: What type of training workshops would entrepreneurs want to attend?

Phase 3 was guided by research question 7:

RQ7: What resources and assistance should public agencies offer that support

entrepreneurship?

There were several limitations to this study. The participants of the study included only

entrepreneurs with businesses in Virginia Beach, Virginia. Because the survey was posted on

Survey Monkey, the researcher did not have control over whether the participants had a

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business in Virginia Beach or were actual business owners. The researcher did not have

access to a complete roster of businesses in the city; therefore, many local business owners did

not get an invitation to participate. All participants self-selected. Forming the VB Small Business

survey was a group effort with the SBS and the researcher did not have complete control of the

questions included.

Limitations of the qualitative phases 1 and 3 include researcher bias and familiarity with

some of the subjects. The researcher was formerly an entrepreneur who had experience using

small business public resources and was acquainted with some of the participants. Being an

insider has its benefits but also brings drawbacks; while this was the ticket for gaining access

and interviewees gave information freely, the researcher had to guard against leading the

interview.

Because qualitative research is contextual and subjective in nature, standards were

followed to reduce bias and increase trustworthiness, which replaces reliability and validity in

social constructivism (Hays & Singh, 2012; Koch, 2006). To maximize trustworthiness, the

researcher kept detailed field notes and memos during the research process to improve

credibility and create an audit trail. Peer debriefing helped increase ethical validation. In Phase

1, the researcher consulted business experts who are members of the Small Business

Subcommittee before conducting the interviews and also during the process. For Phase 3,

multiple researchers coded and interpreted the data.

Triangulation of data methods helped improve credibility, transferability, confirmability,

authenticity, sampling adequacy and substantive validation (Hays & Singh, 2012; Koch, 2006;

Tucker et al., 1995). Validity was increased by comparing data obtained through different

methods (Priest, 2002). Data were triangulated by using different classifications of businesses,

methodological triangulation was used by including two sets of interviews and unobtrusive data,

and investigator triangulation was used for Phase 3 interviews.

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Phase 1: Website Observation and Interviews

To answer the first two research questions, ten Virginia Beach entrepreneurs were

interviewed in Phase 1 and unobtrusive data was collected from the Virginia Beach “Business

Resources” website page. Using criterion sampling, the researcher selected businesses with

brick and mortar location(s) in Virginia Beach. Five different types of business were identified

for data collection for the first phase: four retail stores, three restaurants, a hair salon, a health

service provider, and a fitness operation. All of the entrepreneurs had prior experience in

business; seven had worked jobs in their industries and three had experience running other

businesses. The information from the website observation and the interviews helped design a

survey questionnaire for the Phase 2.

Phase 2: Virginia Beach Small Business Survey

In the second phase of the study, a survey instrument was designed based on data from

Phase 1, the literature review, and input form SBS members to answer research questions 3, 4,

5, and 6. The survey included a total of 17 Likert scale questions; 12 questions addressed the

operations of the city. Two open ended questions allowed participants to add additional

thoughts. Demographic questions were voluntary. The questionnaire was tested for content and

face validity; 25 business owners in Virginia Beach participated in the beta test and

amendments were made on the instrument as recommended by participants.

The population in Phase 2 included 351 Virginia Beach business owners. Descriptive

statistics were used to analyze data and a factor analysis was performed to validate the

instrument for future studies. Volunteers on the SBS met to code the open ended questions.

The results of the Likert questions and the responses to the open ended questions were used to

develop a conceptual model identifying entrepreneur resources important for business startup

and growth.

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Phase 3: Interviews

For the third phase of the study, a purposeful sample of 13 entrepreneurs were

interviewed, representing small business owners who have used public services for startup

assistance in Virginia Beach. To confirm the model developed in Phase 2 of the study, the

participants were asked and to identify resources Virginia Beach could provide small business

owners that assist business startup and expansion. Three researchers coded the data and

identified five distinct themes that were used to develop the model for recommended resources

and support services for small businesses in Virginia Beach, confirming the data analysis from

the Virginia Beach Small Business Survey.

Conclusions

Phase 1: Website Observation and Interviews

The website review revealed that while there were quite a number of linked sources with

excellent information and training available, most of it was buried deep in the webpage within an

abundance of small-font text and a few real “gems” were found far down the page. Because the

very first link takes a visitor to a dead end (“page not found”), it is possible that visitors may give

up on this source early on.

None of the interviewees considered looking to the city of Virginia Beach as a resource

for assistance in developing their enterprises; one was led to the SBDC by his banker and

another entrepreneur contacted SCORE.

Therefore, they all looked to industry associates and friends for advice; four did some

research online. Only one of the interviewees had sought resources (a mentor) about running a

business since opening, the others called on a client, banker, attorney, or distributor for advice

or collaboration.

The participants wish they had more information before opening up their businesses,

because as P1-5 commented “it’s just a ‘work in progress” and nascent entrepreneurs “learn

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from mistakes” (P1-6) or “learn[ed] as we go” by doing (P1-3). In response to this question, six

respondents wished that the city had been more helpful by giving clear directions on the

process; four suggested that departments within the city communicate better so that business

owners understand the requirements without having to return to the office several times.

The data from the interviews revealed some additional themes that emerged. Virginia

Although some of the respondents had a good experience dealing with city employees

during their business startup; those who voiced the most problems had experience opening

operations in other cities. Citing that the city is disorganized and employees have bad attitudes,

respondents described running back and forth between departments due to lack of clear

directions with departments not communicating with one another, resulting in wasting valuable

time and even causing expensive delays for independent entrepreneurs who historically do not

have deep pockets to cover unexpected losses. During this process, the city employees do not

treat the business owners as “customers” who provide city taxes that pay salaries and add to

the community coffers. Altogether, the seasoned entrepreneurs expressed that they felt that the

experience was frustrating.

“So I wasted, countless hours…” (P1-2)

“It’s a standing joke that we have, no matter how prepared you are, they always send

you home to get something else.” (P1-7)

“It’s a hassle. It's a hassle. That's bureaucracy.” (P1-5)

Phase 2: Virginia Beach Small Business Survey

The respondents’ believed that Virginia Beach prefers large businesses over small and

indicated the need to streamline processes, offer incentives and training, provide startup

information, and update the website. Participants who answered the open ended questions

expressed concerns about taxes, favoritism, city employee attitudes, and the process for

opening a business. They requested business incentives, learning and networking

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opportunities, and a business incubator. Suggestions were made for updating the website and

adding services offered in neighboring cities.

The factor analysis identified three components that explained 59.79% of the variance. Verimax

rotation with Kaiser Normalization converged 7 iterations to further define the underlying

structures. Factor 1, which suggested a relationship with “helpful for business startup”, loaded

five items and was found to be highly reliable, α = .78. Factor 2, which suggested a relationship

with “encourages business expansion” loaded six items and was also found to be highly reliable,

α = .81. Because factor 3 suggested only one item, “City taxes inhibit growth”, this component

could either be eliminated or enhanced with additional questions to address the construct in

future studies.

The majority of survey respondents (56.1%) indicated that they are unaware of services

and training offered by the city, yet 73.5% of participants indicated an interest in attending

various small business workshops.

Phase 3: Interviews

The interviews with entrepreneurs who had experience using public business resources

revealed insight to the information obtained from the VB Small Business Survey. Participants

appreciated the policymakers who initiated the Virginia Beach survey and had interest in

improving the small business development in the city. They elaborated on themes that emerged

in Phase 2 of the study and identified ways that the city can support small business startup and

growth.

There was agreement that Virginia Beach could improve their resources for new

businesses by providing better information and streamlining the process. Participants found the

website to be “out of date and hard to use” (P3-1). Frustration resulted from unnecessary delays

when business owners were not informed of the process causing, as P3-8 put it, a “lot of

pucker!” Getting permits was a recurring problem and several described some form of

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runaround.

“When it came to building permits that was ridiculous.” (P3-7)

“The maze of permits, and where to go, in which building…. It's a cumbersome run

around.” (P3-2)

Confirming the perception that the city favors large businesses over small entities and

businesses at the oceanfront, participants suggested that Virginia Beach should develop more

of a welcoming attitude toward small entities, since “cities live and die off the revenue for

business sales” (P3-12). This includes an attitude change for the city employees who don’t

show empathy for new business owners due to lack of understanding. They also recommended

that the policymakers consider considering tax breaks and other incentives. The entrepreneurs

agreed that the city could support entrepreneurship by providing access to education, business

networks, and other learning opportunities to assist startups and existing businesses. They do

not think that training offered by the city has to be free because according to P3-12, “if it’s worth

my time, it's worth my money.” The data obtained from the interviews confirmed the themes

from the model developed in Phase 2 and were used to modify the final model.

Recommendations

The model developed from the data defined five clusters that guided the

recommendations: Information, Process, Small Business Attitude, Training, and Support.

Information

Concierge. The City of Virginia Beach should make it easier for entrepreneurs to find

the information they need to open a business. A small business “central office” should be

established and staffed by an individual or team that has startup experience. In this “one-stop”

location, business owners can find all the information they need regarding licenses and permits.

The staff can direct the entrepreneur through the process, acting like a “concierge”.

Website. The Virginia Beach website should be updated and made user-friendly. The

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“checklist” should be easy to find and can be segmented by industry. Information on permits

and zoning should be clear and the website can create a portal to area resources that assist

business startups in the private sector. Apps could be developed to facilitate processes for

business startup, obtaining permits, or paying taxes. The website should include links to

learning opportunities, both face-to-face local workshops and online courses that are available.

Checklist. The steps to take for opening a business in s city should be compiled on a

“checklist” that business owners can follow to keep the process organized. These steps can be

published as documents or brochures that will be available on the website and at the city

offices. They should also be distributed to local stakeholders such as commercial leasing

agents, bankers, business attorneys, and accountants, as these individuals often see the

entrepreneur first.

Process

Streamline Process. The process for opening a new location should be streamlined,

eliminating the current practice of sending individuals back and forth between buildings. Very

clear directions are needed that spell out the requirements so that entrepreneurs know what

documents they need to bring to the city office, eliminating multiple visits that waste valuable

time and “runaround”.

Helpful Employees. City leadership must develop a culture among the City employees

that respects and appreciates small business. Business owners produce needed revenue for

the city budget and some need more “hand-holding” navigating the government system while

going through the startup process. City employees that work with entrepreneurs should receive

training to improve employee awareness: (a) the critical importance small business plays to

increase city revenue and (b) how employees can assist business owners by understanding

their challenges. The recommendation by P76, “City departments need incentives to get work

done in a timely manner”, illustrates the aspect that for entrepreneurs, time is money.

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Small Business Attitude

Incentives. Participants in all three phases of the study indicated that small business

owners have fewer financial resources, especially in the early years of business. The City

should look for ways to assist small businesses with tax breaks and incentives that are offered

to larger businesses. They should also understand that Virginia Beach competes with other

cities for startups and know which incentives and tax breaks are offered in neighboring cities.

End the Perception of Favoritism. Business owners in the area perceive Virginia

Beach to prefer larger businesses and national chains as well as businesses located at the

oceanfront. Explained by P3-7:

“It's difficult because you want the government to be a, what's the best way to put

it, level playing field, but it seems like instead of picking favorites from amongst the ones

that need it most, they are picking favorites amongst the ones that are high profile.”

While perceptions are difficult to change, they can make inroads here by awarding city contracts

to Virginia Beach small businesses and by giving incentives to larger businesses when they

“work with the small” (P3-1).

Attitude. In addition to ending the perception of favoritism, interview and survey

participants suggested that the city consider adopting a “small business attitude” and city

leaders can look to find ways to assist small businesses in startup and expansion in Virginia

Beach. The metropolitan area is home to the largest active-duty U.S. military population

("Defense: Virginia beach department of economic development," 2015), and current initiatives

focus on assisting retiring service members and veterans. While the SWaM” (Small Woman

and Minority) office is also active in Virginia Beach, some survey participants felt left out. The

city can start by publicizing that “Virginia Beach is open for Small Business” and adopting a

proactive attitude toward all small business.

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Training

Learning. Starting with the Concierge in the central office and made available on the

website, information can be given to business owners that answers common questions and

enlightens inexperienced and experienced owners alike. The city does not need to produce

elaborate trainings; links on the website can lead to training available online and also to

workshops that are offered by various outside organizations. Directing entrepreneurs to

StartWheel and 1MC are examples. The Department of Economic Development should

consider adding more workshops for business owners and partnering with Regent University or

TCC to facilitate the effort. Using the results from Phase 2 of this study, topics could include (in

order of popularity): Secrets of Small Business Success, Understanding Business Taxes,

Internet Marketing/SEO, Using Social Media, Strategic Planning, and Getting Investors for Your

Business, Small Business Accounting, Pricing Strategies and Developing a Marketing Plan.

Technology should be used to deliver these workshops to owners that have little time to leave

their operations for training.

Mentoring. Providing mentors for entrepreneurs may not be the job for city government,

as stated by several participants, but the City can provide information to business owners about

available local resources and direct individuals to existing programs. The Concierge can act as

a conduit for this information as well.

“I think if I had somebody who have help me not have made as many mistakes before I

first opened my first business, I think it would have probably helped me be more

successful after…” (P1-7)

Networking Informal business networks provide strong opportunities for entrepreneurs

to learn from one another. While the City does not need to develop new networks, they can use

their existing resources to direct business owners to industry-specific networks that currently

operate in the city.

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“A networking opportunity, something available monthly or quarterly.” (P3-13)

This can be established on the website and the marketing materials that are developed (see

Checklist) can direct individuals to the site.

Support

Finally, Virginia Beach can begin to create a culture that supports small businesses by

considering supporting a business incubator or developing new or existing shopping areas in

the city.

Incubators. Business incubators and accelerators assist small business growth.

Though the City currently sponsors an accelerator with bio-tech firm(s) together with Tidewater

Community College (TCC), they could partner with TCC or Regent University, to facilitate an

incubator and develop a program based on successful incubators in other areas. Policymakers

could fund a location as P3-3 and 3-6 suggested, and partner with Norfolk’s Hatch to run the

operations. Another suggestion would be to sponsor co-working spaces to offer startups low-

rent for their fledgling businesses.

Independent District. Creating a district for independent retail shops and restaurants is

one of the most interesting concepts from the interviews and yet perhaps the most difficult to

execute at the same time. Small businesses thrive in other cities where they are grouped

together in a physical location. Consumers know they can find unique experiences and escape

the “cookie cutter’ establishments at shopping malls.

Directions for Future Research

The interviews with entrepreneurs and survey results illustrated the contrast between

different business types and their needs for growth; small business owners are not all alike.

Individuals enter into entrepreneurship for a number of different reasons, measuring their

success on both financial and non-financial criteria, including lifestyle, flexibility, and personal

satisfaction (Estay, Durrieu, & Akhter, 2013; Walker & Brown, 2004). Aulet & Murray (2013)

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identify 2 types of entrepreneurs: high growth and lifestyle. High growth entrepreneurs build a

competitive advantage by bringing new ideas in the technical, market, or business-model

domain and create what they call “innovation driven enterprises”(IDEs) with global opportunities

for high growth potential. Lifestyle entrepreneurs create the more common type of startup,

“small and medium enterprises” (SMEs) whose business ideas are more traditional and serve

local markets. The requirements for these entrepreneurs vary significantly.

To clarify these different needs, Steve Blank goes further to differentiate six varieties of

startups:

1. Lifestyle Startups: individuals create a business out of their passion so that they can

continue to pursue their passion (a surfer with a surf shop, for example).

2. Small-Business Startups: the overwhelming number of small businesses are set up

to “feed the family”, and many of these are barely profitable (hairdressers,

carpenters, consultants, for example).

3. Scalable Startups: these entrepreneurs envision their company “changing the world”

by building scalable businesses and seek venture capitalists who will eventually

publicly trade the company (Facebook and Google, for example).

4. Buyable Startups: these are set up to be sold to larger companies (mobile apps, for

example).

5. Social Startups: started by individuals who are passionate more to “make a

difference” than to scale and grow a profitable enterprise (non-profits, for-profit, or

hybrids).

6. Large-Company Startups: these large corporations are experiencing shorter life

cycles and disruptive changes from external threats which require innovation for

business survival (Android and Google, for example) (Blank, 2011, 2013a).

Although the needs of these entrepreneurial types are considerably different,

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governments that try to promote entrepreneurship generally group all startups together.

Entrepreneurship programs and education should address the differences between these

founders and the financial strategies needed. Policy makers should decide which groups they

want to help and grow; understanding them will make the difference between success and

failure (Blank, 2011).

The model developed in his study can be used for future research to determine business

friendliness in other cities. While the factor analysis identified two distinct factors, the third

factor (city taxes) requires further research and could be expanded upon in future studies.

Additional research will aid Virginia Beach in developing an effective and engaging City website.

Stakeholders could study efforts made in cities nationally known as “business friendly” and by

investigating how to incorporate technology to improve ease of use and provide clear

information for entrepreneurs. Finally the second phase of the study identified a gap for further

research. The majority of participants (73.5%) were interested to participate in public

workshops to assist startups, yet the survey results indicated that most entrepreneurs were

unaware of services the city currently offers. Future studies could research this gap and identify

ways that the city can develop and deliver training that facilitates participation of business

owners.

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Protocol Questions – Phase 1

Background questions

a. What kind of business do you operate?

b. When did you open your business?

Seeking and Identifying Information

1. Did you seek information on how to open and operate a business before making your decision to start

up your business?

a. Why? / Why not?

b. How did you know what information you needed?

2. Where did you find the information/resources?

a. Did you go to the City of Virginia Breach website? If so, how navigable was it?

b. Were you satisfied with the quality of information you identified?

c. How useful was the information/resources you found?

3. How did you determine what kind of information you needed?

a. Financial

b. Local government regulations

c. Business operations

Using the Information

4. Have you sought more information since opening your business?

a. How are you using this information?

5. How helpful was the city of Virginia Beach in helping you establish your business?

a. Did you consider contacting economic Development for assistance?

b. How about the SBDC? (are you aware of their programs)

6. Now that you’ve started up your business, what information/resources do you wish you’d had before

starting your business?

7. What kind of barriers, if any, did you encounter in opening [or expanding] your business?

8. What recommendations would you make to the City of Virginia Beach to help them improve business

entry and growth?

Thank you so much for your participation! Your responses will help the Virginia Beach develop solutions

to benefit small business growth in the city.

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INTERVIEW CONSENT FORM

My name is Karen Eagle and I am a graduate student under the direction of Professor Tomovic

in the College of Education at Old Dominion University. I am conducting a research study for

my doctorate degree to learn the access and use of small business resources in Virginia Beach.

Your participation will involve answering questions about resources that you found to help you

open or expand your business.

I would like your permission to interview you and use your comments in my study. The

interview will last approximately 20 minutes. The results of the research study may be

published, but your name will not be used. The data collected will be kept secure and

confidential at all times. Each interview will be given an individualized tracking number, and all

responses will be recorded and summarized using this number. All information collected will

remain confidential and the interview notes will be destroyed at the end of the study.

Your participation in this study is voluntary. If you choose not to participate or to withdraw from

the study at any time, there will be no penalty. Although there may be no direct benefit to you,

the possible benefit of your participation could improve resources and assistance for small

business growth by the city of Virginia Beach.

If you have any questions concerning this research study, please contact me at (757) 418-2424

or [email protected]. You may also contact Professor Tomovic at 757-683-4305 or

[email protected].

Sincerely,

Karen Eagle

I agree to participate in this study.

Signature _________________________________________Date ________________

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Virginia Beach Small Business Survey

1. Before I opened my business I contacted ___ (check all that apply) for guidance:

a. A banker, lawyer, and/or an accountant

b. The city of Virginia Beach

c. A mentor

d. Industry associations

e. Business associates/friends

2. A five point Likert scale ("strongly agree, somewhat agree, neutral, somewhat

disagree, strongly disagree") will measure responses to the following questions:

1) Before I opened my business I had previous experience working in the same

industry.

2) The biggest challenge I had to overcome to start my business was getting

capital/funding.

3) The biggest challenge I had to overcome to start my business was finding

qualified employees.

4) The biggest challenge I had to overcome to start my business was finding

information regarding government requirements or city regulations (permits,

licenses, taxes, zoning).

5) The biggest challenge I had to overcome to start my business was finding a cost

effective location.

6) City employees are helpful and receptive to working with small businesses.

7) Virginia Beach outlines clear steps for a streamlined process in opening a

business in the city.

8) I was able to locate all the information that I needed on the VB website.

9) I am aware of services that the city offers to assist business owners to open a

business.

10) The city does a good job informing and encouraging businesses to use all of the

private sector resources available for assistance in opening and operating a

business.

11) I looked at other cities in the Hampton Roads area to open my business and

found that VB offered more help in the process.

12) City departments and inspectors are more interested in assisting to achieve

compliance than penalizing businesses.

13) I feel that the city encourages business expansion by offering incentives.

14) The city gives a preference for larger businesses over small businesses.

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1 5 4

15) The department of economic development is aware of the impact on existing

small business when they offer incentives for competing larger businesses.

16) The level of city administered taxes has inhibited the growth of my business.

17) I feel that the city encourages business expansion by offering education or

mentors.

3. I would be interested in attending one or more of the following training workshops for

business owners:

a. Small Business Accounting b. Strategic Planning c. Pricing Strategies d. Internet Marketing/SEO e. Setting Goals f. Getting Investors for your Business

g. Developing a Marketing Plan h. Customer Service–Keeping

Customers i. Using Social Media j. Understanding Business Taxes k. Secrets of Small Business Success l. Understanding Cash Flow

4. Please use the following space to make suggestions that will make Virginia Beach

friendlier to businesses of every size.

(give parameters for space/number of characters allowed – 500)

5. Is there any other information you feel the Small Business Subcommittee needs to

know?

(give parameters for space/number of characters allowed – 500)

Demogr aphic Questions – end of the s urvey

What is your type of business?

a. Construction Trades

b. Professional Services

c. Retail

d. Manufacturing

e. Food Service

f. Personal Service

g. Healthcare / Biotechnology

h. Other

How many years have you been in business?

a. Less than one year

b. 1-2 years

c. >2-5 years

d. >5-10 years

e. More than 10 years

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How many employees do you have in your business? (including yourself)

a. 1

b. 2-5

c. 6-10

d. 11-20

e. 21-49

f. More than 50

What is your estimated Annual Revenue?

a. Less than $100,000

b. $100,000 -$250,000

c. $250,000 – $500,000

d. $500,000 – $1,000,000

e. $1,000,000 – $5,000,000

f. More than $5,000,000

Did you own a previous business or do you have another location?

a. Yes

b. No

What is your gender?

a. Female

b. Male

Which race/ethnicity best describes you? (Please choose only one.)

a. American Indian or Alaskan Native

b. Asian / Pacific Islander

c. Black or African American

d. Hispanic American

e. White / Caucasian

What is your preferred language?

a. English

b. Spanish

c. Tagalog

d. Other

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1 5 6

Protocol Questions – Phase 3

1. How can the city be more helpful for business startups?

2. To what degree are these things are important for the city to provide:

a. List for steps to take to open a business

b. City information (e.g. demographics)

c. Directions on how to get permits

d. City employees who have a helpful attitude

i. Coordination between city departments

e. Streamlined process for new business owners

i. What would this process look like?

f. Advice on how to get started in business (e.g. mentors)

i. Should this service remain with Economic Development?

3. Should the city provide business incubators?

a. What advice would you give city leaders for starting these?

4. Should the city provide tax incentives for small businesses?

a. What kind of tax incentives/breaks would you recommend?

5. How important is the city website for obtaining information?

a. What information would you like to be able to access on the website?

b. What services could the city add to the website to make VB friendlier to

business?

6. How can the city improve the use of these resources?

7. What services are needed that are missing?

8. How should the city inform small business owners of the available services?

9. Do you have any recommendations for the Virginia Beach to make the city more

‘business friendly’?

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VITA

Karen Eagle Virginia Beach, Virginia

ACADEMIC DEGREES Doctor of Philosophy, Education: Occupational/Technical Studies

Old Dominion University (2016) Master of Science: Business and Industry Training Old Dominion University (2010) Bachelor of Science – Marketing Education James Madison University (1983)

PROFESSIONAL EXPERIENCE 2016 – Present Adjunct Professor, School of Business and Leadership, Regent

University 2015 – Present Human Subjects Review Committee Administrator, Darden College of

Education, Old Dominion University 2015 – Present Assistant, ATMAE Program Accreditation, Old Dominion University 2012- Present President, Karen Eagle Associates: Small Business Consulting 2014 Graduate Teaching Assistant, Old Dominion University 2012-2013 Fashion Program Coordinator, The Art Institute of Virginia Beach 2010-2012 Instructor, Old Dominion University 1990-2007 Entrepreneur/small business owner, Karen Eagle Inc.: Fashion

specialty stores in Virginia Beach and Richmond, Virginia 1996-2007 Producer/Event Planner, The Karen Eagle Bridal Showcase, Virginia

Beach and Richmond 2003-2007 Designer, 2B Bride, private label gown collection, headquartered in

Trenton, NJ 1984-1990 Marketing Education Teacher, Virginia Beach Public Schools

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PRESENTATIONS “Access and Use of Small Business Resources in Virginia Beach” City Council Small Business Subcommittee, Virginia Beach, VA, January 2015 "Teamwork in the Classroom: Stimulating Collaboration, Innovation and Creativity"

Virginia Association of Marketing Educators, Virginia Beach, VA, August 2014 “Inventory Management, Marketing, and Merchandising” Hampton Roads Retail Academy, Virginia Beach, VA, April and May, 2014 “Purpose, Passion, and Persistence: Follow Your Path” National Association of Women Business Owners, Norfolk, VA, March 2014 “2014 Trend and Color Forecast” Old Dominion Fashion Exhibitors, Virginia Beach, VA, November, 2013 “Marketing and Merchandising” Hampton Roads Retail Academy, Portsmouth, VA, March 2013 “Retailing Olympics: Go for the Gold!” Old Dominion Fashion Exhibitors, Virginia Beach, VA, September 2012 HONORS AND AWARDS DIVA Bridal Retailer of the Year, AmericasMart, Atlanta, GA, 2005 Outstanding Professional Woman, Business Community of Hampton Roads, Virginia

Beach, VA, 2001 Best Formal Wear Shop, Gold Award, “Best of the Beach”, Best of Hampton Roads,

1995 – 2007 MEMBERSHIPS 1Million Cups Virginia Beach, Organizer United States Association for Small Business and Entrepreneurship (USASBE) Small Business Subcommittee, Virginia Beach

Wk5 Case Study: Entrepreneurship

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